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Exhibit 10.13
EMB-145
PURCHASE AGREEMENT NUMBER GCT-025/98
EMBRAER - EMPRESA BRASILEIRA
DE AERONAUTICA S.A.
AND
SOLITAIR CORP.
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INDEX
ARTICLE
01 - DEFINITIONS
02 - SUBJECT
03 - PRICE
04 - PAYMENT
05 - DELIVERY
06 - CERTIFICATION
07 - ACCEPTANCE AND TRANSFER OF OWNERSHIP
08 - STORAGE CHARGE
09 - DELAYS IN DELIVERY
10 - INSPECTION AND QUALITY CONTROL
11 - CHANGES
12 - WARRANTY
13 - TECHNICAL ASSISTANCE SERVICES
14 - SPARE PARTS POLICY
15 - PUBLICATIONS
16 - ASSIGNMENT
17 - RESTRICTIONS AND PATENT INDEMNITY
18 - MARKETING AND PROMOTIONAL RIGHTS
19 - TAXES
20 - APPLICABLE LAW
21 - ARBITRATION
22 - JURISDICTION
23 - TERMINATION
24 - OPTION FOR THE PURCHASE OF ADDITIONAL EMB-145 AIRCRAFT
25 - INDEMNITY
26 - NOTICES
27 - CONFIDENTIALITY
28 - INTEGRATED AGREEMENT
29 - NEGOTIATED AGREEMENT
30 - COUNTERPARTS
31 - ENTIRE AGREEMENT
32 - NO WAIVER
33 - REPRESENTATIONS AND WARRANTIES
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ATTACHMENTS
"A" - AIRCRAFT SPECIFIC CONFIGURATION, FINISHING AND REGISTRATION MARKS -
"APPENDIX 1" - TECHNICAL DESCRIPTION
"B" - FERRY EQUIPMENT, SPARE PARTS POLICY AND LIST OF PUBLICATIONS
"C" - WARRANTY CERTIFICATE - MATERIAL AND WORKMANSHIP
"D" - EMB-145 PRICE ESCALATION FORMULA
"E" - DISPATCH RELIABILITY GUARANTEE
"F" - FORM OF AUTHORIZED REPRESENTATIVE APPOINTMENT
"G" - FORM OF WARRANTY BILL OF SALE
"H" - FORM OF GUARANTEE
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PURCHASE AGREEMENT N(0) GCT-025/98
THIS AGREEMENT IS ENTERED INTO AS OF THIS ____ DAY OF JUNE, 1998 BY AND BETWEEN
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A. AND SOLITAIR CORP., FOR THE
PURCHASE AND SALE OF EMBRAER AIRCRAFT, SERVICES AND RELATED SPARE PARTS.
THIS AGREEMENT SUPERCEDES AND REPLACES (A) PURCHASE AGREEMENT GCT-020/98 DATED
MAY 15, 1998, AND (B) LETTER AGREEMENT GCT-021/98, DATED MAY 15, 1998, AS
AMENDED BY AMENDMENT NUMBER ONE TO LETTER AGREEMENT, DATED MAY 22, 1998, BOTH OF
WHICH HAVE TERMINATED IN ACCORDANCE WITH THE TERMS OF LETTER AGREEMENT
GCT-021/98 WITHOUT LIABILITY TO EITHER PARTY. THE SALE COVERED BY THIS AGREEMENT
SHALL BE GOVERNED SOLELY BY THE TERMS AND CONDITIONS HEREIN SET FORTH, AS WELL
AS BY THE PROVISIONS SET FORTH IN THE ATTACHMENTS HERETO.
THIS AGREEMENT SHALL NOT BE EFFECTIVE UNLESS AND UNTIL IT IS SIGNED BY AN
AUTHORIZED OFFICER OF SOLITAIR CORP. AND EXECUTED BY TWO AUTHORIZED OFFICERS OF
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A.
1. DEFINITIONS
For the purpose of this Agreement, the following definitions are hereby
adopted:
a. Actual Delivery Date - shall mean, with respect to each Aircraft,
the date on which Buyer obtains title to that Aircraft in accordance
with Article 7(c).
b. Aircraft - shall mean the EMB-145 LR aircraft or, where there is
more than one of such Aircraft, each of the EMB-145 LR aircraft,
manufactured by Embraer, for sale to Buyer pursuant to this
Agreement (for the avoidance of doubt shall include Firm Aircraft
and Option Aircraft), according to the Technical Description number
TD-145 /010, dated January 1998 (Appendix I) and the Aircraft
Specific Configuration, Finishing and Registration Marks described
in the Attachment "A" to this Agreement as may be amended from time
to time by Buyer at its expense as specified in Article 11. The
Preliminary Technical Description and Aircraft Specific
Configuration which are contained in Attachment "A" hereto, shall be
substituted by Buyer's Aircraft Technical Specification no later
than three (3) months prior to the first Aircraft Contractual
Delivery Date. The Aircraft is composed entirely of vendor parts and
parts manufactured by Embraer and Embraer subcontractors,
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and the parts manufactured by Embraer and Embraer subcontractors
shall have Embraer part numbers.
c. Agreement - shall mean this Purchase Agreement No. GCT-025/98, its
Attachments, and any Letter Agreement between the Parties executed
on the date hereof.
d. Business Day - shall mean days on which the banks in each of New
York, New York, United States and Sao Paulo, and Sao Jose dos
Campos, S.P. Brazil are open for the normal transaction of business.
e. Basic Price - shall mean the Aircraft total price, effective on the
date of execution of this Purchase Agreement contained in Article 3
(a)(1) or, in case of revision thereof, on the date of its revision.
f. Buyer - shall mean SOLITAIR CORP., a Delaware corporation with its
principal place of business at 411 West Putnam Avenue, Greenwich, CT
06830, United States or its assignee pursuant to Article 16 hereof.
g. Contractual Delivery Date - shall mean the delivery dates referred
to in Article 5 of this Agreement.
h. CTA - shall mean the Aerospace Technical Center of the Brazilian
Ministry of Aeronautics.
i. Designated Operator or "DO" - shall have the meaning specified in
Article 16 hereof.
j. Embraer - shall mean EMBRAER - Empresa Brasileira de Aeronautica
S.A., a Brazilian corporation with its principal place of business
at Av. Brigadeiro Faria Lima, 2170 - Putim, Sao Jose dos Campos, Sao
Paulo, Brazil.
k. FAA - shall mean the Federal Aviation Administration of the United
States of America.
l. Firm Aircraft - shall have the meaning specified in Article 2.a
hereof.
m. Initial Provision List or "IPL" - shall have the meaning specified
in Article 2.b hereof.
n. Option Aircraft - shall have the meaning specified in Article 2.a
hereof.
o. Parties - shall mean Embraer and Buyer.
p. Purchase Price - shall mean the Aircraft total price, effective on
the relevant Aircraft Contractual Delivery Date, resulting from the
application of the Escalation Formula contained in Attachment "D"
pursuant to the terms hereof.
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q. Services - shall mean technical assistance services, as specified in
Article 13 herein.
r. Spares - shall mean line replaceable units, spare parts and ground
support equipment, except engines, available for purchase through
Embraer, to be selected and acquired by Buyer through the initial
provisioning list agreed to by the Parties and provided pursuant to
Article 2.b. (the "IPL").
2. SUBJECT
a. Embraer shall sell and Buyer shall purchase and take delivery of ten
(10) Aircraft ("Firm Aircraft") and, if Buyer so elects, up to
twenty (20) option Aircraft ("Option Aircraft") upon the terms and
conditions contained in this Agreement.
b. Embraer shall sell, and Buyer shall acquire, Spares for each of the
Aircraft. Buyer shall inform Embraer at least six (6) months prior
to the Contractual Delivery Date of the Spares for each Aircraft
selected from IPL for such Aircraft and such Spares shall be
delivered in accordance with Article 5.b.
c. Embraer shall render the Services as specified in Article 13.
3. PRICE
a. Buyer agrees to pay Embraer, subject to the terms and conditions of
this Agreement, in United States dollars, the following prices:
1. The Aircraft Basic Price of [*]
2. Buyer shall have in its sole discretion the right to purchase
up to [*]
[*]Embraer of the list of Spares selected by Buyer from the
IPL.
b. The Services are to be provided [*]
c. The Aircraft Basic Price [*]. Such price as escalated shall be
the Aircraft Purchase Price and [*]
4. PAYMENT
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The prices specified in the previous Article shall be paid in cash, by
means of a wire transfer, on each Business Day specified below by Buyer as
follows for Firm Aircraft:
a. Aircraft
1. An initial deposit of [*] United States dollars) per Aircraft
[*] in total) is due and payable within one (1) Business Day
after signature of this Agreement.
2. A [*] progress payment of each Aircraft Basic Price, less a
credit of [*] per Aircraft based upon payment pursuant to
Article 4.a.1 is due and payable eighteen (18) months prior
to each relevant Aircraft Contractual Delivery Date.
3. [*]
4. [*] prior to each relevant Aircraft Contractual Delivery
Date.
5. The difference between [*] and the amounts previously paid
pursuant to items "a.1" through "a.4" above, is due and
payable [*] of each relevant Aircraft.
6. The balance of each Aircraft Purchase Price, shall become due
and payable upon acceptance of each relevant Aircraft by
Buyer.
b. Spares:
1. [*] or the date of delivery of the Spares calculated in
accordance with Article 5.b, and in no event later than
the Aircraft Contractual Delivery Date if the Buyer fails
to select Spares within the time provided for in Article 2.b.
2. [*] shall become due and payable upon delivery of the Spares
items as set forth in Article 5.b.
c. Late Payments and Termination for Failure to Make Payments:
Interest will accrue at a Rate of [*] per month or any
part thereof on any amount not paid to Embraer as set forth in
Article 4.a and 4.b above from the date on which such payments
should have been made or as set forth therein until the actual
receipt by Embraer of such amounts. However, if the late payment is
a
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deposit or progress payment required by items "a" or "b" above for
any Aircraft or Spares, Embraer shall grant Buyer a three (3)
Business Day grace period within which to make the required payment
and shall refrain from sending out the notice referred to below in
this item "c" for the three (3) Business Day grace period. Such
grace period shall apply only to the first late deposit or progress
payment by Buyer under this Agreement. Such grace period shall under
no circumstances apply to payments due pursuant to Articles 4.a.6
and 4.b.2. If Buyer fails a second time to make any deposit or
progress payment for any Aircraft or Spares, Embraer shall be
entitled to exercise its right pursuant to this item "c" without
waiting for the expiration of the above referenced three (3)
Business Day grace period. In the event Embraer does not receive any
payment required by Articles 4.a and 4.b within ten (10) Business
Days after Buyer receives written notice from Embraer of its failure
to receive the payment, Embraer shall have the right to terminate
this Agreement as to the relevant Aircraft or in its entirety in
accordance with Article 23.c. Furthermore in the event any payment
referred to in Articles 4.a and 4.b is not made when required, and
Embraer has not terminated the Agreement in accordance with this
Article 4.c and the Buyer fails to provide to Embraer, within ten
(10) Business Days after the Embraer notice referred to herein, the
federal reserve wire transfer number for the payment in question and
issued on or before the day such payment was due, Buyer shall also
pay Embraer, [*] in accordance with Article 23.c or through and
including ten (10) Business Days after such payment is due,
whichever is shorter.
5. DELIVERY
a. AIRCRAFT: Subject to payment in accordance with Article 4 and the
provisions of Articles 4, 7 and 9, the Aircraft shall be offered for
delivery by Embraer to Buyer, by means of a notice, for inspection,
acceptance and subsequent delivery in F.A.F. (Fly Away Factory)
condition, at Sao Jose dos Campos, State of Sao Paulo, Brazil,
according to the following schedule. Under no circumstances shall
Buyer be obligated to accept Aircraft 1 or 2 more than three (3)
Business Days prior to the Contractual Delivery Date. Under no
circumstances shall Buyer be obligated to accept Aircraft 3 through
10 more than seven (7) Business Days prior to the Contractual
Delivery Date.
FIRST AIRCRAFT April 30, 1999
SECOND AIRCRAFT June 30, 1999
THIRD AIRCRAFT August 31, 1999
FOURTH AIRCRAFT November 30, 1999
FIFTH AIRCRAFT January 31, 2000
SIXTH AIRCRAFT March 31, 2000
SEVENTH AIRCRAFT May 31, 2000
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EIGHTH AIRCRAFT July 31, 2000
NINTH AIRCRAFT September 30, 2000
TENTH AIRCRAFT November 30, 2000
The above dates are hereafter referred to as the Contractual
Delivery Dates and with respect to the Aircraft, Aircraft
Contractual Delivery Dates.
b. SPARES: Subject to receipt by Embraer of the list of Spares selected
by Buyer from the IPL in accordance with Article 2.b, such items
shall be delivered by Embraer to Buyer in F.C.A. (Free Carrier -
INCOTERMS 1990) condition, at Sao Jose dos Campos, State of Sao
Paulo, Brazil, or at any other port of clearance that Embraer may
identify to Buyer. The provision of Spares for each Aircraft shall
be delivered on the relevant Aircraft Actual Delivery Date. Should
Buyer not inform Embraer of Spares items selected by Buyer within
the schedule set forth in Article 2.b., the Spares shall be provided
to Buyer in F.C.A. condition, at the same places above mentioned,
one hundred eighty (180) days after such Spares are selected by
Buyer. However, Buyer must supply such list of Spares to Embraer no
later than the relevant Aircraft Contractual Delivery Date.
6. CERTIFICATION
On the Actual Delivery Date of an Aircraft, the EMB 145-LR aircraft shall
have valid and effective type certificates issued by the CTA and FAA. The
Aircraft shall also be delivered to Buyer with an export certificate of
airworthiness issued by CTA complying with the requirements of FAA
regulation ("FAR") Part 25 and the requirements of the FAA. The condition
of the Aircraft on delivery and the documentation delivered with the
Aircraft, including the above mentioned export certificate of
airworthiness, shall be sufficient to enable Buyer to obtain an FAR Part
25 certificate of airworthiness for the Aircraft. Subject to the above, it
shall be Buyer's responsibility to obtain such certificate of
airworthiness for the Aircraft, at Buyer's sole expense, although Embraer
will provide assistance if requested to do so, at Buyer's cost. Embraer
shall also provide, with Buyer's assistance, a Brazilian export license
for the export of the Aircraft from Brazil, if required.
7. ACCEPTANCE AND TRANSFER OF OWNERSHIP
a. Unless Embraer notifies Buyer otherwise, the Aircraft shall be delivered
in accordance with the provisions and schedules specified in Article 5
herein. Embraer shall give Buyer fifteen (15) days advance notice of the
date on which Embraer considers that each Aircraft will be ready for
delivery in the condition specified herein. Upon successful completion of
ground and flight tests performed by Embraer, Buyer will receive a
confirmation from Embraer of the day that the Aircraft concerned is ready
for inspection and will provide Buyer within three (3) Business Days
notice of the date of such inspection.
b. Buyer shall be allowed a reasonable period of time to conduct a ground
inspection and an acceptance flight or flights, if necessary
("Inspection") of each Aircraft prior
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to its delivery. All costs including fuel, pilot, and insurance for the
Aircraft's acceptance flight will be provided by Embraer ("Inspection
Costs"). After such acceptance flight and if Buyer accepts the Aircraft in
accordance with this Article 7, each Aircraft will be delivered by Embraer
to Buyer in accordance with Article 6 hereof with its fuel tanks full.
c. Buyer shall accept the Aircraft provided, in the reasonable
determination of Buyer, the Aircraft meets the terms and conditions
of this Agreement. Immediately after such acceptance, Buyer shall
make the payments due, if any, according to Article 4 and accept
delivery of such Aircraft, whereupon good and marketable title and
risk of loss will be transferred to Buyer and Buyer shall execute
the necessary title and risk transfer documents required in order to
effect title transfer, including but not limited to an FAA form Bill
of Sale and a Warranty Bill of Sale substantially in the form
attached hereto as Schedule G. However, in the event of a declared
strike at Embraer of relevant Embraer personnel, or a declared
strike of relevant Buyer personnel, Buyer shall not be required to
accept the Aircraft as provided for herein until three (3) Business
Days after Embraer or Buyer provides notice that such strike has
terminated.
d. If Buyer declines to accept an Aircraft after its Inspection because
the Aircraft failed to meet the terms of this Agreement, Buyer shall
immediately give Embraer notice of all specific reasons for such
refusal and [*], commencing on the first Business Day after receipt
of such notice, to take all necessary actions at no cost to Buyer
in order to resubmit the Aircraft to Buyer for re-inspection.
e. Buyer shall inspect the Aircraft, as provided for in Article 7.b.,
within [*] after receipt of notice from Embraer that all necessary
actions were taken ("Reinspection"). All costs of such Reinspection
shall be borne by Embraer. This period as well as the one mentioned
in item "d" above shall not be considered as part of the thirty (30)
day grace period provided for in Article 9.b.1.
f. Embraer shall ensure that the Spares for each Aircraft are available
for inspection by Buyer on or before the date of delivery in
accordance with Article 5.b. and shall notify Buyer of such
availability. Buyer shall be allowed to inspect the Spares to be
delivered in connection with each Aircraft. If Buyer finds such
Spares acceptable, Buyer shall be entitled, but not obligated, to
inspect the packing process, and if such an inspection is conducted,
Buyer shall thereupon give Embraer notice of acceptance and receipt
of Spares in question, after which notice Embraer shall not be
responsible for shortages or have any liability in regard to any
claim or demand whatsoever, from Buyer, with respect to such
provision and Buyer shall be deemed to have waived any of its rights
with respect to such delivery except for warranty claims submitted
pursuant to Attachment C. If Buyer reasonably rejects one or more of
the Spares during such inspection as not conforming to this
Agreement, Embraer shall replace at Embraer's cost such rejected
Spare or Spares with Spares which are in conformity to the
Agreement. Buyer's failure, including but not limited to Buyer's
refusal to perform the inspection or acceptance of all their
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Spares after being notified of their availability by Embraer, shall
not prevent Embraer from delivering such Spares direct to Buyer in
accordance with Article 5.b. In the event that Buyer does not
inspect the packing process as provided for herein, it shall have
fifteen (15) Business Days to inspect the Spares after Buyer's
receipt of such Spares and serve Embraer with written notice of
acceptance or rejection of such Spares. If Buyer fails to issue the
notice within such fifteen (15) days or provide Embraer with a
shortage claim, it shall be deemed to waive any shortage claims.
g. Should Buyer fail to comply with the procedures specified in any of
the preceding items 7 (a) through 7 (e), Embraer shall not be held
liable for any delays in delivery resulting from such failure.
h. Should Buyer not perform its obligations in accordance with items
7(a) through 7(e) hereof within ninety (90) calendar days to be
computed from the notification specified in item "a" above, Embraer
shall be entitled to either terminate this Agreement with respect to
such Aircraft, pursuant to Article 23.c. or, at its sole discretion,
re-negotiate the terms of this Agreement with respect to such
Aircraft with Buyer. If Buyer wrongfully fails to perform its
obligations in accordance with items 7(a) through 7(e) hereof, at
any subsequent time, Embraer shall be entitled to terminate this
Agreement with respect to all unaccepted or undelivered Aircraft or
related Spares pursuant to Article 23.c. below.
i. Buyer shall be permitted to delegate its duties in this Article 7
and in Article 5 as to the physical Inspection, Reinspection, and
acceptance and delivery of the Aircraft and Spares to its authorized
representative in the form attached hereto as Schedule F.
j. [*]
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[*]
8. STORAGE CHARGE
a. [*]
1. Buyer's failure to perform Inspection or Re-inspection of an
Aircraft, per the date or time period specified in writing by
Embraer, according to Article 7.
2. Buyer's acceptance of an Aircraft when Buyer defaults in the
fulfillment of any payment due and in taking title to such
Aircraft immediately thereafter.
3. Buyer's failure within one (1) Business Day after title
transfer to remove an Aircraft from Embraer's facilities.
Storage charges shall end on the earlier of i) Buyer's and
Embraer's agreement to end such storage charge, ii) removal of
the relevant Aircraft from Embraer's facilities or iii) in the
event this Agreement with respect to such Aircraft is
terminated in accordance with Article 23.
If however, Buyer notifies Embraer in writing ten (10) days in
advance of its expected delay in the performance of its
obligations set forth in this Article 8, the storage charge
shall commence on the fifteenth (15th) day after the
occurrence of the events set forth in this Article 8.a.
b. In the event that an Aircraft Contractual Delivery Date must be
extended by Embraer from that which is designated in Article 5, due
to Buyer's failure to perform any action or provide any information
contemplated by this Agreement other than the ones specified in the
preceding items, and the Aircraft otherwise was to be delivered on
the Contractual Delivery Date, the storage charge shall commence on
the fifteenth (15th) day after the Contractual Delivery Date
relative to such Aircraft.
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c. Buyer shall pay the storage charge set forth in Article 8.a. and
8.b., as applicable, per each month of delay or part thereof, within
five (5) Business Days after the presentation of each invoice by
Embraer.
9. DELAYS IN DELIVERY
a. EXCUSABLE DELAYS:
1. Embraer shall not be held liable or be found in default for
any delays in the delivery of an Aircraft or any Spares or in
the performance of any act to be performed by Embraer under
this Agreement, resulting from the following events or
occurrences, hereinafter referred to as "Excusable Delays":
(a) force majeure (including, but not limited to, war or state
of war, civil war, insurrection, fire, accident, explosion,
flood, act of government or governmental priorities (other
than acts of the Government of Brazil acting in its capacity
as a shareholder of Embraer), requisition, strike, labor
troubles), (b) any delay to the extent resulting from any
failure by Buyer to perform any action or provide any
information contemplated by this Agreement.
2. Within [*] after the occurrence of any of the above mentioned
events which constitute causes of Excusable Delays in delivery
of an Aircraft or any Spares or in the performance of any act
to be performed by Embraer under this Agreement, Embraer shall
send a notice to Buyer, with a requested acknowledgment of
receipt, including a description of details involved and an
estimate of the effects expected upon the timing of the
performance of its contractual obligations.
3. Any such delays shall extend the time for delivery of an
Aircraft or Spares by the same number of days required for the
cause of delay to be remedied. Embraer undertakes to use all
commercially reasonable efforts whenever possible to avoid or
remove any such cause of delay and to minimize its effect on
the Contractual Delivery Date of an Aircraft or Spares.
4. If the cause of such Excusable Delay is such as to last longer
than three hundred (300) days or to render the performance of
this Agreement impossible, then Buyer shall have the option to
terminate this Agreement without liability to either party, in
accordance with Article 23.b.
b. NON-EXCUSABLE DELAYS:
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1. If the delivery of an Aircraft or Spares is delayed, not as a
result of an Excusable Delay, by more than [*] after the
Contractual Delivery Date for such Aircraft or, in the case
of Spares, the date for delivery as agreed between the Parties
in accordance with Article 5.b., Buyer will be entitled to
elect to receive in accordance with item "b.3" below from
Embraer liquidated damages as compensation for such delay
equal to [*], up to the date that the Aircraft is ready for
delivery and available to Buyer by means of confirmation of
the successful completion of ground and flight tests performed
by Embraer, to be provided per Article 7.a, it being
understood that such liquidated damages will not, in any
event, [*] and that it will only be due and payable by Embraer
to Buyer after Buyer pays to Embraer the total Aircraft
Purchase Price and/or Spares items price as applicable. Such
liquidated damages shall be paid at Buyer's option in cash or
in the form of a credit for spare parts or other Embraer-
provided services.
2. The grace period of [*], or part thereof, granted by Buyer to
Embraer as mentioned herein shall prevail if Embraer provides
notice to Buyer advising the expected delay, provided that
such notice shall be issued to Buyer [*] prior to the
relevant Aircraft Contractual Delivery Date, or in the case
of Spares, [*] prior to the date of delivery as agreed
between the Parties in accordance with Article 5.b. The grace
period shall be reduced by the same number of days Embraer
delays the issuance of said notice beyond such [*].
3. If, with respect to a delayed Aircraft or Spares, Embraer does
not receive notice for liquidated damages as mentioned in item
"b.1" above, from Buyer within one hundred and twenty (120)
days after the Delivery Date of such Aircraft, or in the case
of Spares, the date of delivery as agreed between the Parties
in accordance with Article 5.b., Buyer shall be deemed to have
fully waived its right to such liquidated damages.
4. If as a result of a Non-Excusable Delay, the delivery of any
Aircraft will be delayed to a date beyond the Contractual
Delivery Date or any revised date previously agreed to in
writing by the parties, the price escalation formula set forth
in Attachment D will not apply with respect to the days
constituting the delay.
5. Embraer hereby acknowledges that the schedule by which the
Aircraft and Spares are to be delivered as set forth in
Article 5 hereof, was a material inducement to Buyer to enter
into this Agreement. Consequently, it hereby represents and
warrants to Buyer that in the event of a nonexcusable delay by
Embraer, Buyer's delivery positions will not be unfairly
prejudiced relative to the delivery positions of any other
purchaser or acquirer ("Purchaser") of any
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EMB-145 aircraft, by Embraer having declared a Nonexcusable
Delay in accordance with this Agreement. If Buyer's delivery
positions are unfairly prejudiced for less than 15 days
relative to any other Purchaser's delivery positions, such
delay shall not be considered a breach of this Article 9.b.5.
In the event of Seller's breach of the representation and
warranty provided for herein, Buyer may terminate this
Agreement in accordance with Article 23.b.1. and/or may seek
damages for Embraer's breach in accordance with Article 23.a.
c. DELAY DUE TO LOSS OR STRUCTURAL DAMAGE TO THE AIRCRAFT:
Should any Aircraft be destroyed or damaged before acceptance by the
Buyer to the extent that it becomes commercially useless, Buyer may,
at its sole discretion take a replacement Aircraft under the same
terms and conditions of this Agreement at a later delivery date to
be agreed by the Parties. Within three (3) months after such loss,
Embraer will provide Buyer with a new delivery date for a
replacement Aircraft. If Buyer in its sole discretion rejects the
new delivery date after further consultation with Embraer on
scheduling the delivery of the Aircraft, it may terminate this
Agreement with respect to such Aircraft and the Spares to be
delivered with such Aircraft, by notice to Embraer given in
accordance with Article 25, without any liability to either party
and Embraer will return all deposits and progress payments paid with
respect to such terminated Aircraft to Buyer within five (5)
Business Days after Embraer receives the notice referred to above
with interest at the [*] commencing on the date such deposits and
progress payments were paid to Embraer. In the event Embraer fails
to return the deposits and progress payments with accumulated
interest to Buyer as provided for herein, Embraer should also pay
to Buyer additional interest of [*] on such outstanding amounts not
paid by Embraer from the date on which such payments should have
been made until receipt by the Buyer.
10. INSPECTION AND QUALITY CONTROL
a. Buyer is hereby permitted to have one or more authorized
representatives at Embraer's facilities for a period commencing
three (3) months prior to the Contractual Delivery Date of each
Aircraft in order to assure that the Aircraft, Spares and Services
were developed in accordance with the procedures specified in this
Agreement and according to all applicable quality control standards.
Buyer may communicate its concerns as to the production of the
Aircraft and Spares to Embraer.
b. Buyer shall communicate to Embraer the names of its authorized
representatives, by means of notice, at least fifteen (15) days
prior to the arrival of the authorized representatives, provided
written notice is given to Embraer fifteen (15) calendar days prior
to effectivity.
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c. Such representatives may also be authorized to sign the acceptance
and transfer of title and risk documents and accept delivery of the
Aircraft and Spares pursuant to Article 7.
d. With respect to this Article 10, Embraer shall provide for use in
accordance with the Agreement at no cost to Buyer, communication
facilities (telephone and facsimile) for Buyer's authorized
representatives, as well as the necessary tools, measuring devices,
test equipment and technical assistance as may be necessary to
perform acceptance tests.
e. Buyer's authorized representatives shall observe Embraer's
administrative rules and instructions while at Embraer's facilities,
and Buyer's representatives will be provided with all appropriate
rules and regulations upon arrival.
f. Buyer's authorized representatives shall be allowed exclusively in
those areas related to the subject matter hereof and Buyer agrees to
hold harmless Embraer from and against all and any kind of
liabilities in respect to such representatives, for whom Buyer is
solely and fully responsible under all circumstances and in any
instance except to the extent caused by the gross negligence or
willful misconduct of Embraer, its officers, directors, employees or
agents.
11. CHANGES
a. At delivery each Aircraft will comply with the standards defined in
Attachment "A" and shall incorporate all modifications which are
classified as Airworthiness Directives (AD's) mandatory by CTA or
FAA and shall also at Delivery incorporate any change agreed upon by
Buyer and Embraer in accordance with this Article 11.
b. All the specified tray-mounted avionic equipment installed in the
Aircraft shall be of the latest modification standard made available
to Embraer by the relevant vendor at such time as not to violate the
delivery schedule of the Aircraft. All other parts will be of the
latest modification standard available at the moment of scheduled
installation in the Aircraft.
c. Embraer may make changes in the design of the Aircraft, the
definition of which and its respective classification shall be in
compliance to the Aircraft type specification, as follows:
1. MINOR CHANGES: defined as those modifications which shall not
adversely affect the Aircraft in any of the following:
o Performance, weight or balance;
o Structural strength, flight qualities, operation and/or
characteristics;
o Interchangeability of parts reasonably defined by
Embraer as interchangeable;
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o Aircraft delivery, delivery dates, and prices;
o Operational safety;
o Ease of maintenance;
o Noise and environmental control
2. MAJOR CHANGES: defined as those modifications which affect at
least one of the topics mentioned in item "c.1." above.
d. Embraer shall have the right, without the prior consent of Buyer, to
make Minor Changes, as referred to in item "c.1" above, in the
design of the Aircraft. The costs of any such changes shall be borne
by Embraer.
e. Major Changes as referred to in item "c.2." above which are
classified as AD's mandatory by CTA and or FAA shall be conveyed to
Buyer by means of Service Bulletins, approved by said authorities.
Incorporation of such Service Bulletins in all Aircraft and Spares
yet to be delivered to Buyer will be made by Embraer at Embraer's
own costs, in a commercially reasonable period of time.
Incorporation of Service Bulletins in Aircraft and Spares delivered
to Buyer shall be made by Buyer at its own cost but for Service
Bulletins which are issued arising from mandatory AD's issued by the
FAA or CTA and which relate to defective parts which are identified
by an Embraer part number ("Embraer AD's"). Such Embraer AD's shall
be provided to Buyer in accordance with the warranty period provided
in Attachment C. When flight safety is affected, such changes will
be immediately incorporated.
Whenever warranty coverage is not available or applicable, item "e"
of this Article 11 shall apply. No indemnification shall be due by
Embraer for the down-time of the delivered Aircraft needed for the
incorporation of any such changes but for delays caused by the
incorporation of Embraer AD's. In the event of delay caused by
incorporation of Embraer AD's, Embraer shall be responsible for
liquidated damages in accordance with Article 9.b (and the price
escalation formula as set forth in Attachment D shall not apply with
respect to any delay occasioned by the need to incorporate an AD).
Embraer shall not be held liable for any delays in the Aircraft
Contractual Delivery Date resulting from the execution of any change
classified as mandatory by CTA or FAA when the Aircraft shall have
already passed the specific production stage affected by the
incorporation of said change. In the event that an AD is issued by
the CTA or FAA prior to delivery with a terminating action date
after delivery of the relevant Aircraft and Embraer has a solution
for implementation of such AD prior to delivery and such
implementation will not alter the delivery date of such Aircraft,
Embraer will use commercially reasonable efforts to incorporate such
AD prior to delivery of the relevant Aircraft .
f. Major Changes (other than those which are AD's mandatory per item
"e" above), any change developed by Embraer as product improvement,
and any change requested by Buyer which are either Major or Minor ,
including those changes required by FAA
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as a consequence of alterations, amendments and/or innovations of
its present airworthiness regulations which are in effect subsequent
to the date of the Agreement but before an Aircraft Delivery Date
and which are applicable to all aircraft in general as the all
aircraft of the same category as the Aircraft, shall be considered
as optional and, pursuant to Buyer's request, the corresponding cost
proposals shall be submitted by Embraer to Buyer for consideration
and approval. Should Buyer not approve any such change, it shall not
be incorporated in the Aircraft.
g. Any change made by Embraer in accordance with the preceding items
which affects the provisions of Attachment "A", shall be
incorporated in said Attachment by means of an amendment. The
amendment shall be submitted to Buyer for signature thirty (30) days
prior to the relevant Aircraft Contractual Delivery Date, a copy of
which shall be received by Embraer, duly signed, prior to such
Aircraft Actual Delivery Date.
h. Except as it relates to AD's made mandatory by CTA or FAA which do
not materially affect the performance of the Aircraft and Minor
Changes, should an Aircraft not comply with the terms and conditions
of Attachment "A", Buyer shall be entitled to either terminate this
Agreement with respect to that relevant Aircraft, pursuant to
Article 23.d, or, at its sole discretion, renegotiate the terms and
conditions of this Agreement with Embraer.
12. WARRANTY
The Aircraft and Spares will be warranted in accordance with the terms and
conditions specified in Attachment "C". The warranty may not be assigned
except as permitted therein or by Article 16.
13. TECHNICAL ASSISTANCE SERVICES
a. Familiarization and technical support programs specified below are
being offered at no charge to Buyer unless otherwise specified,
except for the expenses involved with travel and lodging of
Designated Operator's trainees, which shall be borne by Buyer or
Designated Operator (as defined in Article 16). Such familiarization
and technical support programs shall be in accordance with Embraer's
training syllabus.
b. Notwithstanding the use of the term "training" in this Article 13 or
in the Agreement, the intent of the Services is solely to
familiarize a Designated Operator's pilots, mechanics, employees or
representatives, duly qualified per the governing body in the United
States of America, with the operation and maintenance of the
Aircraft. It is not the intent of Embraer to provide basic training
("Ab-initio") to any representatives of a Designated Operator.
c. The Services, as applicable, shall be provided prior to the last
Aircraft Actual Delivery Date as shall be agreed upon by Buyer and
Embraer and in accordance with Article 7.j. herein. Each Designated
Operator must give notice to Embraer
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one-hundred and twenty (120) days in advance of Designated
Operator's expected training schedule. Should Buyer or a Designated
Operator not take all or any portion of the Services on or before
the delivery of Buyer's last Aircraft, Buyer and the relevant
Designated Operator shall be deemed to have fully waived their
rights to such service. No other penalty or indemnity shall be due
from Embraer in this case.
d. All Services shall be provided by Embraer or its qualified
designated representative at Embraer's facilities at Fort
Lauderdale, Florida, USA, or at such other location as Embraer shall
reasonably designate in the United States, except that flight
training may also be designated by Embraer to occur in Brazil if it
cannot reasonably occur in the United States.
e. The Services in regard to the Firm Aircraft shall include:
1. One (1) Pilot Familiarization Program for up to [*] pilots
of the Designated Operator's pilots per Firm Aircraft
including ground familiarization as regards Aircraft systems,
weight and balance, performance and normal/emergency
procedures; Flight simulator training in accordance with
Designated Operator's approved Flight Operations Training
Program, up to, but not exceeding the equivalent training in
Level C simulator.
2. One (1) Maintenance Familiarization Course for up to [*]
qualified mechanics of the Designated Operator's mechanics per
Firm Aircraft. This course shall consist of classroom
familiarization with Aircraft systems and structures and shall
be in accordance with ATA specification 104, level III.
3. One (1) Flight Attendant Familiarization Course for up to
[*] of Designated Operator's flight attendant representatives
per Firm Aircraft. This course shall consist of classroom
familiarization, including a general description of Aircraft
and systems to be used by flight attendants if requested,
Embraer may demonstrate procedures described in the classroom,
subject to Buyer's Aircraft availability.
4. [*] Embraer technical [*] selected by Embraer in its sole
discretion shall be assigned to stay at the main maintenance
base of the first Designated Operator in the United States in
order to assist and advise such Designated Operator on
Aircraft maintenance during its initial operation and to act
as liaison between such first Designated Operator and
Embraer. The presence of Embraer's technical representative
in the maintenance base of such first Designated Operator
shall be free of charge for the first [*] after the first
Actual Aircraft Delivery Date. Thereafter, every time Buyer
requests the placement of an Embraer technical representative
at a Designated Operator's installations, Embraer will charge
Buyer for any such Designated Operator according to Embraer's
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price list per month per each such Embraer's technical
representative's presence.
At no charge to Embraer, Buyer shall insure and require the
Designated Operator to provide such representative with
reasonable communication facilities (telephone and facsimile)
as well as office space and facilities at the main maintenance
base of the Designated Operator. Buyer shall also cause the
Designated Operator to (a) arrange all necessary work permits
and airport security clearances required for Embraer
employees, to permit the accomplishment of the services
mentioned in this item "4", in due time; and (b) obtain all
necessary custom clearances both to enter and depart from the
United States for Embraer's employees and their personal
belongings and professional tools. During the stay of the
Embraer's technical representative at the Designated
Operator's base, Buyer shall cause the Designated Operator to
permit access to the maintenance and operation facilities as
well as to the data and files of Designated Operator's fleet
of aircraft to the extent necessary to perform its obligations
hereunder. Embraer will sign an appropriate confidentiality
undertaking relating to materials made available to its
representatives. Buyer shall cause the Designated Operator to
make available at the office designated for the technical
representative, one (1) set of updated Technical Publications
referred to in Article 15, and it shall be Designated
Operator's responsibility to perform the revision services in
order to maintain such publications updated during the
technical representative's stay at Designated Operator's base.
Buyer shall bear all expenses related to the transportation,
board & lodging of Embraer representative when such
representative shall render the services specified herein in
any place other than the first Designated Operator's main
maintenance base.
Without a previous written authorization from Embraer, Embraer
technical representatives shall not participate in test
flights or flight demonstrations. If Designated Operator
obtains such authorization, Designated Operator shall include
the technical representative in Designated Operator's
insurance policy. Embraer reserves the right to stop the
services mentioned in this item "4", should any of the
following situations occur at Designated Operator's base: a)
there is a declared strike in progress; b) war or war like
operations, riots or insurrections; c) any condition which is
dangerous to the safety or health of Embraer's employee; or d)
the government of the United States refuses permission to
Embraer's employee to enter the country.
f. If Buyer or Designated Operator elects not to take all or any
portion of the Services, no refund or other financial adjustment of
the Basic Price will be made, since such Services are offered free
of charge as referred to in item "b" of Article 3 of the Agreement,
unless the Service is being charged by Embraer as specified in
paragraph e.4 above. Any other additional services shall depend on
subsequent agreement and shall be charged by Embraer accordingly,
except
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that Embraer further agrees, in addition to the Services as
described above, to provide each Designated Operator, at such
Designated Operator's expense, a customized product support package
to meet such Designated Operator's need at service entry.
g. Buyer and the Designated Operator's authorized trainees and
representatives at Embraer's facilities shall be allowed exclusively
in those areas related to the subject matter hereof and Buyer agrees
to, and to cause the relevant Designated Operator to, hold harmless
Embraer from and against all and any kind of liabilities in respect
of such trainees and representatives for whom Buyer and Designated
Operator, as the case may be, are solely and fully responsible under
all circumstances, except to the extent caused by the gross
negligence or willful misconduct of Embraer, its employees or
agents.
14. SPARE PARTS POLICY
Embraer guarantees the supply of spare parts and ground support equipment
for the Aircraft in accordance with Section 2 of Attachment "B" for a
period of [*] Such spare parts and ground support equipment shall be
supplied according to the prevailing availability, sale conditions,
delivery schedule and effective price on the date of acceptance by
Embraer of the purchase order. The spare parts and ground support
equipment may be supplied either by Embraer or through its subsidiaries
or branch offices located abroad.
15. PUBLICATIONS
a. AIRCRAFT PUBLICATIONS - Embraer shall supply, at no cost to Buyer, copies
of operational and maintenance publications applicable thereto, in the
English language and in the quantities as specified in item "3" of
Attachment "B". Such publications are issued under the applicable
specification and are available in hard copies. The revision service for
these publications is provided, free of charge, including mailing services
(except for air cargo shipping), for the first [*] Such publications will
be delivered together with the Aircraft.
If requested by Buyer, one (1) set of basic publications (not reflecting
Buyer's Aircraft configuration) may be supplied earlier, at a time and
location to be agreed upon by the Parties, but in no event before four (4)
months prior the delivery of the first Aircraft.
b. VENDOR ITEMS PUBLICATIONS - With respect to vendor items installed in the
Aircraft which have their own publications, Buyer will receive them in the
quantity specified in item "3" of Attachment "B", in their original
content and printed form, directly from the suppliers, which are also
responsible to keep them continuously updated through a direct
communication system with Buyer.
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16. ASSIGNMENT AND GUARANTEE
a. Provided the warranty provisions in Article 12, 13, 14, 15 and
Attachment B and C are still effective in accordance with their
terms, then after Delivery of an Aircraft and Spares, Buyer may
lease, sell or otherwise transfer the Aircraft and Spares to one or
more air carriers (whether certificated or not and whether based in
the United States or any other country) or to any other entities,
(but for entities or air carriers which are owned, effectively
controlled or managed by or to any other airframe manufacturer which
competes in the thirty seven (37) to seventy (70) seat turbo jet
market) (collectively referred to as "Transferees", and
individually, together with each Other Transferee (as defined
below), a "Designated Operator") and in connection with such leases,
sales, or transfers Buyer may assign Buyer's rights pursuant to
Articles 12, 13, 14, 15 and Attachments B and C with respect to the
relevant Aircraft and Spares to such Transferees provided that Buyer
notifies Embraer of the identity of such Transferees at least thirty
(30) calendar days prior to such transaction and provides Embraer
with prior written notice of any events under such agreement that
would cause any rights thereby assigned to revert to Buyer under
such agreement. In the event such Transferees or Other Transferees
(as defined below) subsequently transfer the Aircraft and Spares,
any Transferees' or Other Transferees' rights which remain pursuant
to Articles 12, 13, 14, 15 and Attachments B and C with respect to
the relevant Aircraft and Spares may also be transferred with
respect to the relevant Aircraft to any other entity (but for
entities or air carriers which are owned, effectively controlled or
managed by any other airframe manufacturer which competes in the
thirty seven (37) to seventy (70) seat turbo jet market) ("Other
Transferees") provided that the Transferees or Other Transferees
notify Embraer of the identity of such other entity at least sixty
(60) calendar days prior to such transaction and provide Embraer
with prior written notice of any events under such agreement that
would cause any rights thereby assigned to revert to Transferees or
Other Transferees under such agreement.
b. Before Delivery Buyer may assign any or all of its rights under this
Agreement to purchase any one or more of the Aircraft and Spares to
any one or more non-Brazilian majority owned subsidiaries of Buyer,
or non-Brazilian affiliates of Buyer or Wexford Management LLC which
as of the date of such assignment are effectively managed by Buyer
or Wexford Management LLC; provided that Buyer guarantees the
payment obligations of such assignee in the form attached hereto as
Attachment H. Buyer may also assign, sell, transfer or dispose of
any or all of its rights and obligations to a financing institution
reasonably approved by Embraer, considering the size of the proposed
financing relative to the creditworthiness of the financing
institution, when such disposition is made in connection with the
initial financing of the progress payments or the final payments
required under this Agreement. Buyer may request, and Embraer will
take, any action reasonably necessary for the purpose of causing an
Aircraft and
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Spares at the time of delivery to be subject to an equipment trust
conditional sale, lien or other arrangement for the initial
financing of the Aircraft and Spares.
c. Except as expressly permitted by this Article 16, Buyer's rights and
obligations hereunder may not be assigned, conveyed, subcontracted,
transferred or delegated, without Embraer's prior written consent.
17. RESTRICTIONS AND PATENT INDEMNITY
This sale does not include the transfer of designs, copyrights, patents,
and other similar rights to Buyer. Subject to Buyer's or Designated
Operator's duty to promptly advise Embraer of any alleged copyright or
patent infringement, Embraer shall indemnify, defend, protect and hold
Buyer and each Designated Operator (including respective officers,
controlling persons, employees and directors) harmless with respect to any
claims, suits actions, judgments, liabilities, damages and costs,
including reasonable attorney fees, made against it or them if the
Aircraft or Spares with Embraer part numbers infringes copyright patents
or the proprietary rights of others. In such event Embraer shall to the
extent necessary and as promptly as possible at its sole option and
expense either
(i) procure for Buyer or its Designated Operator the right under patent
to use the system, accessory or equipment or part;
(ii) replace such system accessory, equipment or part with a
non-infringing item or part of similar quality; or
(iii) modify such system, accessory, equipment or part to make it
non-infringing.
18. MARKETING PROMOTIONAL RIGHTS
Embraer shall have the right to show for marketing purposes, free of any
charge, the image of the Aircraft, painted with Buyer's colors and emblems
or the colors and emblems of any Designated Operator, affixed in
photographs, drawings, films, slides, audiovisual works, models or any
other medium of expression (pictorial, graphic, and sculptural works),
through all mass communications media such as billboards, magazines,
newspaper, television, movie, theaters, as well as in posters, catalogues,
models and all other kinds of promotional material. In the event such
Aircraft is sold to or operated by or for another company or person,
Embraer shall be entitled to disclose such fact, as well as to continue to
show the image of the Aircraft, free of any charge, for marketing
purposes, either with the original or the new colors and emblems, unless
otherwise notified by Buyer or Designated Operator, provided that such
notification shall be subject to the reasonable satisfaction and agreement
of Embraer. If accepted, said prohibition, however, shall in no way apply
to the promotional materials or pictorial, graphic or sculptural works
already existing or to any contract for the display of such materials or
works already binding Embraer at the time of receipt of the notification.
The provisions of this
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Article shall be included in all future sales or lease agreements
concerning the Aircraft.
19. TAXES
Embraer shall pay all taxes arising from the sales subject of this
Agreement, as may be imposed on the sale under Brazilian laws. All other
taxes (but for any U.S. taxes on the income of Embraer or its affiliates
and subsidiaries), impost, fees, withholding taxes, stamp taxes,
documentary taxes and any other similar or dissimilar taxes, as well as
any duties as may be imposed on the sale subject of this Agreement
("Taxes"), shall be borne by Buyer. Upon the request of either party, the
other party shall execute and deliver to the requesting party any document
reasonably necessary or desirable in connection with an exemption from,
reduction of, or the contesting of the imposition of any Taxes.
20. APPLICABLE LAW
This Agreement, and the rights and obligations of the Parties hereunder,
shall in all respects be governed by, and construed and interpreted in
accordance with, the laws of the State of New York (excluding conflicts of
law principles), and including all matters of construction, validity and
performance.
21. ARBITRATION
a. The Parties each irrevocably submit to the exclusive jurisdiction of
arbitration and expressly and irrevocably waive its right to bring suit
against the other party in any court of law except for the limited
purposes of enforcing an arbitral award obtained with respect to a
dispute, or for obtaining any injunctive, temporary or preventative order
or similar order available to it under the laws of any jurisdiction for a
breach or threatened breach by the other party of this Agreement which
threatens irreparable damage.
b. Any dispute submitted for arbitration must be finally settled by binding
and confidential arbitration according to the Rules of the American
Arbitration Association (the "Rules"), except as may be modified by mutual
agreement of Embraer and Buyer. The arbitration, including the rendering
of the award, will be conducted by arbitrators (selected as set forth
below) who are fluent in the English language. The arbitration proceeding
will be conducted with discovery in accordance with the Federal Rules of
Civil Procedure. The arbitrators will be appointed in accordance with the
Rules except as otherwise provided for herein. The arbitration proceedings
will take place in New York, New York, and will be conducted in the
English language.
c. The Arbitrator will be selected as follows: within fifteen (15) Business
Days of the referral of any matter to arbitration, each party will select
an arbitrator. Thereafter, within fifteen (15) Business Days of each
party's selection of an arbitrator, the two
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arbitrators selected by the Parties shall meet to select a mutually
agreeable third arbitrator. In the event a party fails to select an
arbitrator with in the time period specified above, the party that has
timely complied with the selection of an arbitrator shall select a second
arbitrator. These two arbitrators shall within seven (7) Business Days
after the time in which the other party should have selected an
arbitrator, meet to select a mutually agreeable third arbitrator. These
three arbitrators shall comprise the arbitral panel and all arbitral
proceedings shall be conducted in the presence of all three arbitrators.
d. If there is a dispute submitted to arbitration, any subsequent additional
disputes referred for arbitration (including counterclaims between the
parties) will be consolidated in the same arbitration proceeding.
e. The arbitral proceeding will not exceed one hundred (100) days commencing
on the date the last arbitrator accepts his or her appointment. If the
arbitral award is not issued within this time, then the arbitration
proceeding will be automatically renewed for another one hundred (100)
days. Evidence may not be taken in the arbitral proceeding except in the
presence of both parties and all witnesses, if any , may be questioned by
both parties. The only evidence which may be considered by the arbitrators
in reaching their decision is that which is otherwise admissible in
accordance with the then current United States Federal Rules of Evidence.
f. Any decision or award of the arbitrators must be based solely on the terms
of this Agreement and the substantive governing law applicable to this
Agreement. The decision of the arbitrators must be issued in writing with
an explanation of its reasoning, and will be final and conclusive when
issued. Judgment upon the award rendered in the arbitration may be entered
and enforced by the Court specified in Article 21.g. hereof.
g. Each party irrevocably submits to the exclusive jurisdiction of the United
States District Court for the Southern District of New York sitting in the
County of New York for purposes of enforcing any arbitral award or for
other legal proceedings arising out of this Agreement or any transactions
contemplated in this Agreement as provided for herein. However nothing
contained in this Agreement shall be deemed to prevent either party from
enforcing any decision of the United States District Court for the
Southern District of New York sitting in the County of New York for
purposes of enforcing or collecting any such award in any court or
jurisdiction as such party deems necessary or prudent.
h. Each party shall bear its own costs and expenses of arbitration. The
parties shall share equally the costs, expenses and fees of any arbitral
panel designated pursuant to this Agreement.
22. SOVEREIGN IMMUNITY, VENUE AND FORUM NON CONVENIENCE
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Embraer, under the laws of the United States or of any other jurisdiction
affecting Embraer, is subject to private commercial law and suit, and is
not entitled to (and hereby waives) sovereign immunity under any such
laws, for its performance of its obligations under this Agreement.
Embraer's performance of its obligations hereunder constitute commercial
acts done for commercial purposes. The parties hereto furthermore waive to
the extent permitted by law any objections to venue of the United States
District Court for the Southern District of New York sitting in the County
of New York for purposes of enforcing any arbitral award and any right or
claim to any transfer or dismissal of any enforcement proceeding in the
United States District Court for the Southern District of New York sitting
in the County of New York on the grounds of forum non convenience.
23. TERMINATION
a. Should either party fail to comply partially or completely with its
obligations hereunder, the other party shall be entitled to give
notice of such failure and to require that such failure be remedied
within the period specified in that notice, which period shall not
be less than ten (10) days. Should such failure not be remedied
within the period so specified, then the party who gave notice of
such failure shall be entitled to terminate this Agreement. Should
termination occur in accordance with the foregoing, the defaulting
party shall pay to the non-defaulting party, as damages, an amount
determined by agreement or by law. The foregoing provision shall not
apply in any circumstance where a specific right of termination is
available or will be available upon the expiration of a specific
period of time whether or not such termination rights are exercised,
except with respect to Buyer's right to terminate this Agreement in
accordance with Article 23.b in case of termination for a
Non-excusable delay of 90 days or longer as a result of Embraer's
breach of Article 9.b.5 or termination of this Agreement in
accordance with Article 23.b.1.
b. Buyer shall have the right but not the obligation to terminate this
Agreement in respect to the relevant Aircraft, upon the occurrence
of any Excusable Delay in accordance with Article 9.a.4 of three
hundred (300) days or longer, impossibility as provided for in
Article 9.a.4, or any non-excusable delay in accordance with Article
9.b.1 of ninety (90) days or longer after such Aircraft Contractual
Delivery Date, such right to be exercisable by notice from Buyer to
Embraer to such effect no earlier than the three hundredth (300th),
day, ninetieth (90th) day, or in the event of impossibility,
reasonably thereafter, as applicable. Upon receipt of such notice of
termination, Embraer shall, within five (5) Business Days after
Embraer receives the notice referred to above, return to Buyer an
amount equal to the amounts previously paid by Buyer relative to the
relevant Aircraft with interest at the [*] in effect as of the time
such amounts were paid, less the value of equipment previously
delivered and services previously performed by Embraer specifically
for Buyer, permitted assigns, and prospective assigns, with respect
to such terminated Aircraft valued in accordance with Embraer's list
price for such equipment and services at time of such termination in
accordance with
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this Article 23.b and not previously paid for by Buyer. In the event
the equipment referred to above in the immediately preceding
sentence has not been used, it may be returned to Embraer at the
Buyer's sole cost and expense and subject to Embraer's reasonable
right to inspect such equipment, and in the event of such return and
acceptance of the condition of the equipment, the value of such
returned equipment shall not be deducted from the amounts payable by
Embraer as provided for above. No other penalty or indemnity shall
be due from Embraer in this case, except in the case of a
termination for a Non-Excusable Delay of 90 days or longer as a
result of a breach of Article 9.b.5. In the event Embraer fails to
return the deposits and progress payments with accumulated interest
to Buyer as provided for herein, Embraer shall also pay to Buyer
additional interest of one percent (1%) per month on such
outstanding amounts not paid by Embraer from the date on which such
payments were to have been made until receipt by Buyer.
b.1 In the event that Embraer breaches the representations and
warranties contained in Article 9.b.5 Buyer may terminate this
entire Agreement and Embraer will return to the Buyer [*],
permitted assigns, and prospective assigns with respect to such
terminated Aircraft valued in accordance with Embraer's list price
for such equipment and services at time of such termination in
accordance with this Article 23.b.1 and not previously paid for
by Buyer. In the event the equipment referred to above in the
immediately preceding sentence has not been used, it may be
returned to Embraer at the Buyer's sole cost and expense and
subject to Embraer's reasonable right to inspect such equipment,
and in the event of such return and acceptance of the condition
of the equipment, the value of such returned equipment shall not
be deducted from the amounts payable by Embraer as provided for
above. In the event Embraer fails to return the deposits and
progress payments with accumulated interest to Buyer as provided
for herein, Embraer shall also pay to Buyer additional interest
of [*] per month on such outstanding amounts not paid by Embraer
from the date on which such payments were to have been made until
receipt by Buyer. In addition to and not in lieu of this remedy
the Buyer may seek to recover damages for breach of Article 9.b.5
pursuant to Article 23.a.
c. If Buyer terminates this Agreement before an Aircraft Actual
Delivery Date for any reason not attributable to Embraer's default
under this Agreement or, if Embraer terminates this Agreement as to
any Aircraft or in its entirety pursuant to Article 7.h. or Article
4.c., Buyer shall pay to Embraer the amount of all deposits and
progress payments due and owing as of the date of such termination
under this Agreement and shall indemnify Embraer for the value of
equipment previously delivered and/or services previously performed
by Embraer specifically for Buyer, permitted assigns, and
prospective assigns, and for the reasonable costs and expenses of
reconfiguring Aircraft for sale to another customer. Such costs and
expenses shall be based on Embraer's then prevailing price list. For
these
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purposes Embraer may, in its sole discretion, retain all amounts
previously paid by Buyer to apply as part of the payments of the
damages resulting from such default on the part of Buyer.
d. If Buyer terminates this Agreement in respect to an Aircraft or all
Aircraft, as the case may be, pursuant to Articles 9.c or 11.h ,
Embraer, upon Buyer's request, shall within five (5) Business Days
after Embraer receives the notice of termination referred to above,
return to Buyer all amounts previously paid by Buyer with respect to
the relevant Aircraft, with interest at the [*] in effect on the
date of receipt of such amounts. No other penalty or indemnity shall
be due from Embraer in this case. In the event Embraer fails to
return the deposits and progress payments with accumulated interest
to Buyer as provided for herein, Embraer shall also pay to Buyer
additional interest of [*] per month on such outstanding amounts
not paid by Embraer from the date on which such payments were to
have been made until receipt by Buyer.
e. In the case of a termination of this Agreement or as to any
Aircraft, the indemnities set forth in Articles 17 and 25 of this
Agreement and the warranty as provided for in Attachment C hereto
and as such warranty may have been assigned pursuant to Article16.a
with respect to any delivered Aircraft and Spares shall survive the
termination of this Agreement or the termination of this Agreement
with respect to one or more Aircraft.
24. OPTION FOR THE PURCHASE OF ADDITIONAL EMB-145 AIRCRAFT
Buyer shall have the option to purchase the Option Aircraft, to be
delivered at a rate of one Aircraft every other month beginning March 2001
through May 2004, subject to the terms and conditions of this Article 24.
The Option Aircraft shall be divided into four groups of five aircraft.
The groups shall be referred to respectively as " Group One", " Group
Two", " Group Three", and "Group Four". The groups shall be referred to
collectively as the "Option Groups" and each may be referred to
individually as an "Option Group".
a. INITIAL DEPOSIT A deposit of US [*]
b. BASIC PRICE The unit basic price of each Option Aircraft shall be
equal to the Basic Price, provided that such Option Aircraft be
delivered to Buyer between March 2001 and May 2004 and in the same
configuration, specification and installations specified in
Attachment "A", as such attachment is written on the date of
signature of this Agreement unless otherwise modified by the Parties
and the costs for such changes shall be in addition to the Basic
Price.
c. ESCALATION The unit basic price of each relevant Option Aircraft
shall be escalated according to [*]
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d. DEPOSIT AND PROGRESS PAYMENTS The payment of the price specified in
item "c" above, shall be made according to the following:
1. [*]
2. [*]
3. [*]
4. [*]
5. [*]
6. [*]
e. CONFIRMATION OF GROUPS ONE AND TWO Buyer's options to purchase
Option Group One and Option Group Two shall be confirmed on or
before [*] specified above for the first Option Aircraft of
that Option Group.
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* Confidential
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f. CONFIRMATION OF GROUPS THREE AND FOUR If Buyer confirms Group One
and Group Two in accordance with item "e" above, Buyer shall receive
an option to purchase Group Three. If Buyer confirms Group Three in
accordance with this item "f" , Buyer shall receive an option to
purchase Group Four. The delivery positions in Group Three and Group
Four (the "Proposed Delivery Positions") are subject to availability
until confirmed by Embraer in accordance with this item "f".
1. If Buyer has satisfied the requirements of items "a" and "e"
above and has notified Embraer in writing that it desires to
confirm the relevant Option Group, no later than [*] in that
Option Group, Embraer shall notify Buyer whether the Proposed
Delivery Positions are available for the Option Group. This
notice shall be referred to as the "Confirmation Notice" and
shall be provided no later than [*]
2. The Confirmation Notice shall offer either the Proposed
Delivery Positions for the Option Group or other delivery
positions. If the Confirmation Notice offers the Proposed
Delivery Positions for the Option Group, or if Buyer accepts
the other offered delivery positions within [*] after receipt
of the Confirmation Notice, then the offered delivery
positions shall immediately be removed from the market by
Embraer, Buyer shall be deemed to have confirmed the Option
Group, and the Option Aircraft in the Option Group shall be
purchased pursuant to this Agreement.
g. FAILURE TO CONFIRM; RETURN OF DEPOSIT If Buyer (i) fails to confirm
an Option Group as provided in items "e" or "f" above, (ii)
renounces its rights to receive any Option Group, or (iii) fails to
obtain an option to purchase Group Three or Group Four, Buyer shall
have no right to acquire Option Aircraft in that Option Group and
the relevant portion of the deposit made according to item "d.1"
above, if any, shall be refunded to Buyer within five (5) Business
Days after Buyer's failure to confirm, renunciation of , or failure
to obtain, an option to purchase the Option Group, with interest at
the [*] commencing on the date such deposits were paid to Embraer,
or at Buyer's option Embraer shall apply any amounts paid by Buyer
to any amounts then due and owing to Embraer by Buyer. In the event
Embraer fails to return the deposits with accumulated interest to
Buyer as provided for herein, Embraer shall also pay to Buyer
additional interest of [*] per month on such outstanding amounts
not paid by Embraer from the date on which such payments were to
have been made until receipt by Buyer.
h. SERVICES The services Embraer will provide pursuant to Article 13 in
regard to the Option Aircraft which will be delivered pursuant to
this Article 24 shall be in accordance with Article 13.e.1 - 4
above, but such Services per Option Aircraft shall be limited to one
(1) pilot Familiarization Program for up to [*] pilots per
Option Aircraft, one (1) Maintenance Familiarization Course for up
to [*]
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qualified mechanics per Option Aircraft, and one (1) Flight
Attendant Familiarization Course for up to [*] flight
attendants per Option Aircraft.
25. INDEMNITY
Buyer agrees to indemnify and hold harmless Embraer and Embraer's
officers, agents, employees and assignees from and against all
liabilities, damages, losses, judgments, claims and suits, including costs
and expenses incident thereto, which may be suffered by, accrued against,
be charged to or recoverable from Embraer and/or Embraer's officers,
agents, employees and assignees by reason of loss or damage to property or
by reason of injury or death of any person (excluding Embraer's officers,
directors, employees or agents) resulting from or in any way connected
with the performance of services by employees, representatives or agents
of Embraer for or on behalf of Buyer related to Aircraft delivered by
Embraer to Buyer or a Designated Operator, including, but not limited to,
technical operations, maintenance, and training services and assistance
performed while on the premises of Embraer, a Designated Operator, or
Buyer, while in flight on Buyer-owned Aircraft or while performing any
other service, at any place, in conjunction with the Aircraft except to
the extent caused by the gross negligence or willful misconduct of
Embraer, its employees or agents.
26. NOTICES
All notices permitted or required hereunder shall be in writing in the
English language and sent, by registered mail, express courier or
facsimile, to the attention of the Sr. Manager - Contracts as to Embraer
and of the President as to Buyer, to the addresses indicated below or to
such other address as either party may, by written notice, designate to
the other. In the event notice is issued by registered mail or express
courier, it shall be deemed received on the day on which the party
receiving such notice executes the delivery receipt . In the event notice
is issued by facsimile, it shall be deemed received on the day on which
the sender of such notice receives a facsimile confirmation receipt of
such facsimile notice.
a. Embraer:
EMBRAER - Empresa Brasileira de Aeronautica S.A.
Av. Brigadeiro Faria Lima, 2170
12.227-901 Sao Jose dos Campos - SP
BRAZIL
Attention:
Senior Manager, Contract Administration
Telephone: (55-12)345-1410
Facsimile: (55-12)345-1257
b. Buyer
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* Confidential
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Solitair Corp.
411 West Putnam Avenue, Suite 125
Greenwich, CT 06830
USA
Attention: Frederick Simon, President
Telephone: (203) 862-7011
Facsimile: (203) 862-7490
with copies to
Wexford Management LLC
411 West Putnam Avenue, Suite 125
Greenwich, CT 06830
USA
Attention: Jay L. Maymudes, Principal and Chief Financial Officer
Telephone: 203-862-7050
Facsimile: 203-862-7350
27. CONFIDENTIALITY
Neither party shall have the right to disclose the terms of this Agreement
except as required by law. To the fullest extent permitted by law, except
as aforesaid, neither party shall disclose any portion of this Agreement
or its Attachments, amendments or any other supplement, to any third
party, other than to its accountants, attorneys, agents, consultants or
permitted assignees without the other party's prior written consent, and
any such accountants, attorneys, agents consultants or permitted assignees
shall agree in writing to be bound by the terms of this Article 27.
Without limiting the foregoing, in the event either party is legally
required to disclose the terms of this Agreement, the parties agree to
exert their reasonable best efforts to request confidential treatment of
the clauses and conditions of this Agreement relevantly designated by
either party as confidential. Notwithstanding the foregoing, nothing
contained herein shall limit the ability of the Buyer (i) to disclose (a)
information relating to the specifications of the Aircraft, (b) the
delivery schedule relating to the Aircraft, or (c) copies of Attachments
A, B, C, F, or G to the Agreement to any prospective buyer, lessor,
assignee or any agent or broker with respect to any Aircraft, or (ii) to
disclose, subject to a confidentiality agreement reasonably acceptable to
Embraer, copies of relevant portions of this Agreement to any prospective
lender with respect to any Aircraft (provided that such lender is a
permitted lender pursuant to Article 16.b).
28. INTEGRATED AGREEMENT
All Attachments referred to in this Agreement and attached hereto are, by
such reference and attachment, incorporated in this Agreement. This
Agreement, including all Attachments and all amendments, modifications and
supplements, is herein and hereinafter called the "Agreement" or the
"Purchase Agreement".
<Page>
29. NEGOTIATED AGREEMENT
This Agreement, including all of its Attachments, has been the subject of
discussion and negotiation and is fully understood by the Parties, and the
rights, obligations and other agreements of the Parties contained in this
Agreement are the result of complete discussion and negotiation between
the Parties.
30. COUNTERPARTS
This Agreement may be signed by the Parties in any number of separate
counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument and all of which when taken together shall
constitute one and the same instrument.
31. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the Parties with
respect to the sale described as its subject and supersedes all previous
and connected negotiations, representations and agreements between the
Parties. This Agreement may not be altered, amended or supplemented except
by a written instrument executed by the Parties.
32. NO WAIVER
Any party's forbearance from exercising any claim or remedy provided for
herein shall not be deemed a waiver of such claim or remedy, and shall not
relieve the other Party from the performance of such obligation at any
subsequent time or from the performance of any of its other obligations
hereunder.
33. REPRESENTATIONS AND WARRANTIES
A. Effective as of the date of this Agreement and as of the Actual
Delivery Date of each Aircraft, Embraer represents and warrants that:
1. Embraer is a corporation duly organized, validly existing and in
good standing under the laws of Brazil, is the manufacturer of the
EMB-145 LR Aircraft and has all necessary corporate power and
authority to conduct the business in which it is currently engaged
and to enter into and perform its obligations under this Agreement.
2. Embraer has taken, or caused to be taken, all necessary corporate
action to authorize the execution and delivery of this Agreement and
the performance of its obligations hereunder.
<Page>
3. The execution and delivery by Embraer of this Agreement, the
performance by Embraer of its obligations hereunder and the
consummation by Embraer of the transactions contemplated hereby, do
not and will not (A) violate or conflict with any provision of the
constitutional documents of Embraer, (B) violate or conflict with
any law, rule, or regulation applicable to or binding on Embraer or
(C) violate or constitute any breach or default (other than a breach
or default that would not (x) result in a material adverse change to
Embraer or (y) adversely affect Embraer's ability to perform any of
its obligations hereunder),under any agreement, instrument or
document to which Embraer is a party or by which Embraer or any of
its properties is or may be bound or affected.
4. The execution and delivery by Embraer of this Agreement, the
performance by Embraer of its obligations hereunder and the
consummation by Embraer of the transactions contemplated hereby do
not and will not require the consent, approval or authorization of,
or the giving of notice to, or the registration with, or the
recording or filing of any documents with, or the taking of any
other action in respect of, (A) any trustee or other holder of any
indebtedness or obligation of Embraer, (B) any national, state or
municipal government regulatory, judicial, or administrative entity
of competent jurisdiction, or (C) any other party.
5. This Agreement has been duly authorized, executed and delivered by
Embraer and, assuming the due authorization, execution and delivery
hereof by the other Party constitutes the legal, valid and binding
obligation of Embraer enforceable against Embraer in accordance with
the terms hereof, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws affecting the rights of creditors generally and
general principles of equity, whether considered in a proceeding at
law or in equity.
6. Each of the foregoing representations and warranties shall survive
the execution and delivery of this Agreement and any termination
hereof.
B Effective as of the date of this Agreement and as of the Actual Delivery
Date of each Aircraft, Buyer represents and warrants that:
1. Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all
necessary corporate power and authority to conduct the business in
which it is currently engaged and to enter into and perform its
obligations under this Agreement.
2. Buyer has taken, or caused to be taken, all necessary corporate
action to authorize the execution and delivery of this Agreement and
the performance of its obligations hereunder.
<Page>
3. The execution and delivery by Buyer of this Agreement, the
performance by Buyer of its obligations hereunder and the
consummation by Buyer of the transactions contemplated hereby, do
not and will not (A) violate or conflict with any provision of the
constitutional documents of Buyer, (B) violate or conflict with any
law, rule, or regulation applicable to or binding on Buyer or (C)
violate or constitute any breach or default (other than a breach or
default that would not (x) result in a material adverse change to
Buyer or (y) adversely affect Buyer's ability to perform any of its
obligations hereunder),under any agreement, instrument or document
to which Buyer is a party or by which Buyer or any of its properties
is or may be bound or affected.
4. The execution and delivery by Buyer of this Agreement, the
performance by Buyer of its obligations hereunder and the
consummation by Buyer of the transactions contemplated hereby do not
and will not require the consent, approval or authorization of, or
the giving of notice to, or the registration with, or the recording
or filing of any documents with, or the taking of any other action
in respect of, (A) any trustee or other holder of any indebtedness
or obligation of Buyer, (B) any national, federal, state or local
government regulatory, judicial, or administrative entity of
competent jurisdiction (other than recordation of the Aircraft with
FAA) or (C) any other party.
5. This Agreement has been duly authorized, executed and delivered by
Buyer and, assuming the due authorization, execution and delivery
hereof by the other Party constitutes the legal, valid and binding
obligation of Buyer enforceable against Buyer in accordance with the
terms hereof, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws affecting the rights of creditors generally and
general principles of equity, whether considered in a proceeding at
law or in equity.
6. Each of the foregoing representations and warranties shall survive
the execution and delivery of this Agreement and any termination
hereof.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]
<Page>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
and delivered by their proper and duly authorized officers and to be effective
as of the day and year first above written.
EMBRAER - EMPRESA BRASILEIRA SOLITAIR CORP.
DE AERONAUTICA S.A.
By:_____________________________ By: /s/ Frederick Simon
-----------------------------
Name: __________________________ Name: Frederick Simon
---------------------------
Title: _________________________ Title: President
--------------------------
By:_____________________________
Name: __________________________
Title: _________________________
Date:___________________________ Date: 6/17/98
---------------------------
Place:__________________________ Place: Greenwich, CT
--------------------------
Witness:________________________ Witness: /s/ Arthur Amron
------------------------
Name:___________________________ Name: Arthur Amron
---------------------------
<Page>
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ATTACHMENT "A" WITH MODIFICATIONS FROM
AMENDMENT NO. 1, NO. 2 AND NO. 3
- --------------------------------------------------------------------------------
NON OFFICIAL DOCUMENT
REFERENCE ONLY
AIRCRAFT SPECIFIC CONFIGURATION, FINISHING AND REGISTRATION MARKS
1. STANDARD AIRCRAFT
The Aircraft shall be manufactured according to the standard configuration
specified in the Technical Description TD-145/010, dated January 1998
(Appendix I) (the "Technical Description") and the optional equipment
described in item 2 below.
2. OPTIONAL EQUIPMENT
2.1 OPTIONS TO THE STANDARD AVIONICS CONFIGURATION
a) CAT-II
b) 2nd Radio Altimeter
c) 2nd DME
d) 2nd ADF
e) 2nd Transponder Mode S
f) Selcal - Trimble
g) FMS/GPS - Honeywell
h) EGPWS
i) VHF (1st and 2nd) 8,33 khz spacing
2.2 OPTIONAL SYSTEM / OTHER EQUIPMENT
a. Thrust Reversers
b. LR version
c. Cockpit Floodlight
d. External Painting (with capability to be reverted to polished)
e. Service Door Sill Protection
f. Cargo Door Sill Protection
g. Cargo Door Light
h. Wiring provision on the panel lamps for Filament Test
i. Structural provision for 10(degree)rudder deflection
j. Wiring provision for the nose landing gear door position
indication in the EICAS
k. Provision for warning of the selection of Flaps 22(degree)to
take-off
l. Provision for limitation of the hydraulic pressure on the
speed brake actuator when the aircraft is above 200 knots
m. Plug type passenger door
<Page>
NON OFFICIAL DOCUMENT
REFERENCE ONLY
2.3 INTERIOR OPTIONAL ITEMS
a. Interior Option 1
b. Audio Entertainment (CD player)
c. 2nd Attendant kit (include Handset/Cradle)
d. Blue Sterile Light
e. Baggage Compartment Class C
f. Standard main door with structural provisions for plug type
door
g. Passenger Seats - Customized Cushion Version Top w/
Ultra-leather
h. Baggage Restraint Net
i. Extra Oxygen Mask (3 mask for each double seat)
3. FINISHING
a. EXTERIOR FINISHING:
The Aircraft shall be painted according to Buyer's or a Designated
Operator's color and paint scheme which shall be supplied to Embraer
by Buyer no later than six (6) months prior to the relevant Aircraft
Contractual Delivery Date.
b. INTERIOR FINISHING:
Buyer shall inform Embraer no later than seven (7) months prior to
the relevant Aircraft Contractual Delivery Date of its choice of
materials and colors of all and any item of interior finishing such
as seat covers, carpet, floor lining on galley areas, side walls and
overhead lining, galley lining and curtain. The above mentioned
schedule for definition of interior finishing shall only be
applicable if Buyer selects its materials from the choices offered
by and available at Embraer. In case Buyer elects to use different
materials and or patterns, such schedule shall be agreed between the
Parties at the time of signature of this Purchase Agreement.
If Buyer does not supply Embraer with the information in the time period
as described in Article 3.a and 3.b, the Aircraft will be produced and
will be made available for Buyer's inspection in the same condition of
exterior and interior finishing as the first Aircraft.
4. REGISTRATION MARKS
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The Aircraft shall be delivered to Buyer with the registration marks
painted on them, which shall be supplied to Embraer by Buyer no later than
ninety (90) days before each relevant Aircraft Contractual Delivery Date.
IF THERE IS ANY CONFLICT BETWEEN THE TERMS OF THIS ATTACHMENT "A" AND THE TERMS
OF THE TECHNICAL DESCRIPTION, THE TERMS OF THIS ATTACHMENT "A" SHALL PREVAIL.
<Page>
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ATTACHMENT "B"
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FERRY EQUIPMENT,
SPARE PARTS POLICY AND LIST OF PUBLICATIONS
1. FERRY EQUIPMENT
If it is necessary for any ferry equipment to be installed by Embraer for
the ferry flight between Brazil and the United States of America, Embraer
may provide such equipment to Buyer, for a price to be agreed between the
Parties. In this case, Buyer shall immediately upon its arrival remove
such ferry equipment from the Aircraft and turn it over to Embraer in
Brazil at Buyer's own expense.
If Embraer provides any ferry equipment to Buyer and if such equipment is
utilized, for any reason, or if such equipment is not returned by Buyer,
in Embraer's sole judgment, complete and in perfect condition, Buyer shall
fully indemnify Embraer for the value of such equipment, provided that in
case of partial utilization of, or damage to any such equipment, the value
to be charged shall be the price of a new complete set of equipment.
In such case, the original equipment shall become the property of Buyer,
and the above mentioned payment shall be made to Embraer by Buyer upon
presentation of a sight draft by Embraer.
The presence of an Embraer qualified crew member during the ferry flight
on the way to Buyer's facilities, to act as second in command to assist in
handling communication with Air Traffic Control (ATC) while overflying
Brazilian airspace up to the last stop within Brazilian territory, shall
depend on previous agreement between the Parties provided that written
advance notice shall be given from Buyer to Embraer at least thirty (30)
days prior to the date of such ferry flight.
2. SPARE PARTS
2.0 POLICY
Embraer's spare parts policy is to provide the following categories
of spares as specified in the respective Embraer publications and
available to be purchased through Embraer:
o Line Replaceable Units (LRU's);
o Parts to repair and overhaul components manufactured under
Embraer specification to be used only on the EMB-145 Aircraft;
o Parts to line maintenance;
o Parts to fulfill all maintenance tasks per maintenance manual
and/or maintenance plan issued by Embraer;
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o Embraer-made parts;
o Aircraft Ground Equipment (AGE);
o Aircraft Ground Equipment spare parts manufactured under
Embraer specifications;
o Special tools; and
o Bulk materials.
2.1 INITIAL PROVISIONING
The objective of the IPL is to provide Buyer with accurate technical
data supplied by Embraer, in order to enable an adequate selection
of spares, aiming to support initial scheduled maintenance, based
upon operational parameters established by Buyer or a Designated
Operator.
2.2 PRE-PROVISIONING CONFERENCE
If requested, Embraer will provide a qualified team to attend
pre-provisioning conferences as necessary to discuss Buyer or a
Designated Operator requirements and all points of the IPL. Such
meeting shall be held at a mutually agreed upon time and place. On
or before such pre-provisioning conference, Embraer shall provide
Buyer with an initial list of recommended provisioning. Buyer and
Embraer shall thereafter agree to the actual initial provisioning
which shall be acquired by Buyer. For the first Firm Aircraft Buyer
and Embraer shall agree on such initial provisioning on or before
one hundred eighty (180) days prior to delivery of the first Firm
Aircraft. For all other Aircraft to be delivered pursuant to this
Agreement Buyer and Embraer shall agree on such initial provisioning
on or before two hundred (200) days prior to delivery of each such
Aircraft.
2.3 DATA
Initial provisioning data will be supplied to Buyer or a Designated
Operator upon request.
2.3.1 INITIAL PROVISIONING DATA: Embraer will supply initial
provisioning data within a time period to be mutually agreed
upon by both Party.
2.3.2 PROVISIONING DATA REVISIONS: As requested, the IPL will have
the data updated by incorporating engineering and price
changes. Embraer will maintain a master copy of the IPL
updated until ninety (90) calendar days after delivery of the
last Aircraft of Buyer's Aircraft fleet.
2.4 SPARE PARTS RECOMMENDATIONS
<Page>
Embraer will provide, if requested, a breakdown of recommended spare
parts to support the components used during the Aircraft operation
(inventory reprovisioning).
2.5 DELIVERY OF SPARE PARTS
Except for those spare parts referred to in item 2.4. above, Spare
items (initial provisioning spare parts) are normally in inventory
and available for delivery on the Aircraft Contractual Delivery
Date. Nevertheless, delivery dates shall be those agreed between the
Party in the relevant Purchase Agreement. Replenishment of Embraer
made parts will be in accordance with the lead times quoted by
Embraer. Embraer will deliver parts in FCA (Free Carrier - Incoterms
1990) condition, at Sao Jose dos Campos, State of Sao Paulo, Brazil,
or at any other port of clearance that may be chosen by Embraer and
informed to Buyer.
2.6 EMERGENCY SPARE PARTS SERVICE
Embraer will maintain an emergency spare parts service, twenty four
(24) hours a day, seven (7) days a week. Embraer will deliver in
F.C.A. condition at Sao Jose dos Campos, State of Sao Paulo, Brazil,
or at any other port of clearance that may be chosen by Embraer and
informed to Buyer, spare parts in inventory needed for
aircraft-on-ground (AOG) orders within twenty-four (24) hours after
receipt. Embraer will notify Buyer (or Designated Operator) of the
action taken to satisfy each emergency in accordance with the
following schedule:
-- AOG (Aircraft-on-Ground) within 4 hours
-- Critical (imminent AOG or Work Stoppage) within 24 hours
-- Expedite (Less than published or quoted lead time) within 7 days
2.7 CREDIT FOR SURPLUS SPARE PARTS
Embraer offers to Buyer a "credit" program for certain surplus parts
manufactured by Embraer and purchased according to the initial
provisioning by Buyer and which were recommended in writing by
Embraer limited to the quantities, part numbers and serial numbers
(if applicable) identified in the relevant invoices. Such program
will provide terms no less favorable than the following:
2.7.1. Credit Program: During the period commencing four (4) years
after delivery of the first Aircraft under the initial
Purchase Agreement between Buyer and Embraer and ending five
(5) years after such delivery, Embraer will, upon receipt of
a written request and subject to the exceptions and
conditions in paragraphs 2.7.1.1; 2.7.1.2; 2.7.1.3 and
2.7.1.4. of this
<Page>
section, offer a credit for new and unused spare parts
manufactured by Embraer (i) which were ordered from Embraer
by Buyer as initial provisioning for Aircraft in accordance
with Embraer's recommendation; (ii) which have been supplied
by Embraer under this Agreement and (iii) which are surplus
to Buyer's needs. Such credit may be used toward the purchase
of spare parts manufactured by Embraer, Technical
Publications or Services offered by Embraer.
2.7.1.1. EXCEPTIONS: Embraer will not issue credits for
spare parts which were purchased by Buyer in
excess to or differently from the parts
recommended in writing by Embraer to Buyer as
initial provisioning for the Aircraft and for
spare parts which have become obsolete or have
been superseded by another part as a result of (i)
Buyer's modification of an Aircraft for which the
spare parts were purchased; (ii) Embraer design
improvements (except for spare parts which have
become obsolete because of a defect in design);
(iii) parts which are shelf-life limited; (iv)
damaged parts; or (v) parts that were not properly
stored.
2.7.1.2. CREDIT VALUES: The credit for each spare part to
be issued by Embraer will be: (i) an amount equal
to ninety percent (90%) of the invoice price of
the spare part paid to Embraer or (ii) an amount
equal to ninety percent (90%) of Embraer's price
for the equivalent spare part at the time of the
issue of credit, whichever is less.
2.7.1.3 DELIVERY OF SURPLUS SPARE PARTS: Spare parts for
which a credit has been requested shall be
redelivered by Buyer to Embraer with prepaid
freight and insurance to Embraer's plant in Sao
Jose dos Campos, SP, Brazil, or any other
destination as Embraer may reasonably designate.
All returned spare parts are subject to Embraer's
quality control inspection and acceptance. All
spare parts which are rejected by Embraer's
quality control and/or are included in the
exceptions set forth in paragraph 2.7.1.1
hereinabove, will be returned to Buyer at Buyer's
expense, no credit being due in this case.
<Page>
2.7.1.4 Credit Issue: After Embraer's acceptance of those
items suitable for the credit program, under the
terms of this Agreement, Embraer will notify the
available credit amount to Buyer and provide all
relevant information as to credit utilization.
2.8. PARTS EXCHANGE PROGRAM
According to its prevailing availability, Embraer may offer an
"exchange program" for repairable parts whenever the vendor does not
have its own exchange program.
2.9. PARTS REPAIR PROGRAM
For any repair required by Buyer or Designated Operator on any
Embraer or vendor repairable item, Embraer may assist Buyer or
Designated Operator to perform such repair in order to ensure the
shortest turn around time (TAT).
2.10. PRICING
Embraer will maintain a spare parts price list updated periodically.
Items not shown on the list will be quoted on request.
3. LIST OF PUBLICATIONS
As provided for in Article 15 of this Agreement, the technical
publications covering operation and maintenance shall be delivered to
Buyer in accordance with the following list:
<Table>
<Caption>
QTY
TITLE (COPIES)
----- --------
OPERATIONAL
1. [*] [*]
2. [*] [*]
3. [*] [*]
4. [*] [*]
5. [*] [*]
6. [*] [*]
7. [*] [*]
8. [*] [*]
</Table>
MAINTENANCE - BASIC SET
- --------
* Confidential
<Page>
<Table>
9. [*] [*]
10. [*] [*]
11. [*] [*]
12. [*] [*]
13. [*] [*]
14. [*] [*]
15. [*] [*]
16. [*] [*]
17. [*] [*]
</Table>
MAINTENANCE SUPPLEMENTARY SET
<Table>
18. [*] [*]
19. [*] [*]
20. [*] [*]
21. [*] [*]
22. [*] [*]
23. [*] [*]
24. [*] [*]
25. [*] [*]
26. [*] [*]
</Table>
(*) One extra copy on board each Aircraft
(**) To be delivered by the suppliers directly to Buyer.
If Buyer elects not to take all or any one of the publications above mentioned,
or revisions thereof, no refund or other financial adjustment of the Basic Price
will be made since such publications are offered at no cost to Buyer as referred
to in Article 15.a of the Purchase Agreement.
- ----------
* Confidential
<Page>
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ATTACHMENT "C"
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WARRANTY CERTIFICATE - MATERIAL AND WORKMANSHIP
EMB-145
1. Embraer, subject to the conditions and limitations hereby expressed,
warrants each Aircraft as follows:
a. For a period of thirty-six (36) months from the date of delivery of
each Aircraft to the first Buyer, each Aircraft will be free from:
- Defects in materials, workmanship and manufacturing processes
in relation to parts manufactured by Embraer or by its
subcontractors holding an Embraer part number;
- Defects inherent to the design of the Aircraft and its parts
designed or manufactured by Embraer or by its subcontractors
holding an Embraer part number.
b. For a period of twenty-four (24) months from the date of delivery of
each Aircraft to the first Buyer, each Aircraft will be free from:
- Defects in operation of vendor (Embraer's supplier)
manufactured parts, not including the Engines, Auxiliary Power
Unit (APU) and their accessories, as well as failures of
mentioned parts due to incorrect installation or installation
not complying with the instructions issued or approved by
their respective manufacturers.
- Defects due to non-conformity to the Technical Description
Number TD 145 /010 dated January 1998 as may be amended by
Buyer's Aircraft Technical Specification referred to in
Article 1.b of the Purchase Agreement of the Aircraft.
Once the above mentioned periods have expired, Embraer will transfer to
Buyer the original warranties issued by the vendors, if they still exist.
2. Embraer, subject to the conditions and limitations hereby expressed,
warrants that:
a. All spare parts which have been manufactured by Embraer or by its
subcontractors holding an Embraer part number, and by vendors which
will permit their particular identification and which have been sold
by Embraer or its representatives will, for a period of twenty four
(24) months from the date of delivery of such spares to Buyer, be
free from defects of material,
<Page>
workmanship, manufacturing processes and defects inherent to the
design of the above mentioned parts.
b. All ground support equipment, which has been designed and
manufactured by Embraer or by its subcontractors holding an Embraer
part number and by vendors, not including Engines, APU and their
accessories, and stamped with a serial number which will permit
their particular identification and which have been sold by Embraer
or its representatives will, for a period of twelve (12) months from
the date of delivery to Buyer of said equipment, be free from
malfunction, defect of material and manufacture.
c. Each Aircraft is composed entirely of vendor parts and parts
manufactured by Embraer and Embraer subcontractors, and the parts
manufactured by Embraer and Embraer subcontractors shall have
Embraer part numbers.
3. The obligations of Embraer as expressed in this warranty and as specified
in Article 11.e are limited to replacement, repair or rework of the
defective item, depending solely upon Embraer's own judgment, of the parts
that are returned to Embraer or its representatives within a period of
sixty (60) days after the occurrence of the defect, at Buyer's own expense
(including but not limited to, freight, insurance, taxes and, customs
duties), adequately packed, provided that such components are actually
defective and that the defect has occurred within the periods stipulated
in this certificate. Should the defective part not be shipped to Embraer
within such sixty (60) days period, Embraer may in its sole discretion,
deny the warranty claim. In the event that it is not practical in the
international commercial transportation industry to return the part or
component which is the subject of a warranty claim under this Attachment
C, to Embraer, because of either its extremely large size or its
relationship to the Airframe, then thirty (30) days after a defect is
found in such structural component (hereafter referred to as "Structural
Component"), Buyer shall send notice of such defect to Embraer and
notwithstanding the above, Buyer shall not be obligated to return such
Structural Component to Embraer. Embraer shall thereafter send an
appropriate inspection team to Buyer's facilities to inspect the
Structural Component for the alleged defect. In the event that Embraer in
its sole judgment finds the Structural Component defective, it shall
either repair, rework, or replace the defective Structural Component.
Notification of any defect claimed under three (3) above must be given to
Embraer within thirty (30) calendar days after such defect is found.
Parts supplied to Buyer as replacement for defective parts are warranted
for the balance of the warranty period still available from the original
warranty of the exchanged parts. However, freight, insurance, taxes and
other costs eventually incurred during the shipment to Embraer or its
representative, re-installation and adjustments are Buyer's
responsibility.
<Page>
4. Embraer will accept no warranty claims under any of the circumstances
listed below unless it can be demonstrated in accordance with the
standards of the international aircraft manufacturing industry that such
operation or maintenance or other circumstance did not cause the defect:
a. When the Aircraft has been used in an attempt to break records, or
subjected to experimental flights, or in any other way not in
conformity with the flight manual or the airworthiness certificate,
or subjected to any manner of use in contravention of the applicable
aerial navigation or other regulations and rules, issued or
recommended by government authorities of whatever country in which
the aircraft is operated, when accepted and recommended by I.C.A.O.;
b. When the Aircraft or any of its parts have been altered or modified
by Buyer, without prior approval from Embraer or from the
manufacturer of the parts through a service bulletin;
c. Whenever the Aircraft or any of its parts have been involved in an
accident, or when parts either defective or not complying to
manufacturer's design or specification have been used;
d. Whenever parts have had their identification marks, designation,
seal or serial number altered or removed;
e. In the event of negligence, misuse or maintenance services done on
the Aircraft, or any of its parts not in accordance with the
respective maintenance manual;
f. In cases of deterioration, wear, breakage, damage or any other
defect resulting from the use of inadequate packing methods when
returning items to Embraer or its representatives.
5. The warranty hereby expressed does not apply to defects presented by
expendable items, whose service life or maintenance cycle is lower than
the warranty period, and to materials or parts subjected to deterioration.
6. The warranty hereby expressed is established between Embraer and the first
Buyer, and it cannot be transferred or assigned to others, unless by
written consent of Embraer, or as otherwise provided for pursuant to
Article 16 of the Purchase Agreement of which this is an Attachment or
Article 9 hereof.
7. THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF Embraer AND REMEDIES OF
Buyer SET FORTH IN THIS WARRANTY CERTIFICATE ARE EXCLUSIVE AND IN
SUBSTITUTION FOR, AND Buyer HEREBY WAIVES, RELEASES AND RENOUNCES, ALL
OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF Embraer AND ANY ASSIGNEE
OF Embraer AND ALL
<Page>
OTHER RIGHTS, CLAIMS AND REMEDIES OF Buyer AGAINST Embraer OR ANY ASSIGNEE
OF Embraer, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT
TO ANY NON-CONFORMANCE OR DEFECT OR FAILURE OR ANY OTHER REASON IN ANY
Aircraft OR OTHER THING DELIVERED UNDER THE PURCHASE AGREEMENT OF WHICH
THIS IS AN ATTACHMENT, INCLUDING DATA, DOCUMENT, INFORMATION OR SERVICE,
INCLUDING BUT NOT LIMITED TO:
a. ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
b. ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE;
c. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER
OR NOT ARISING FROM THE NEGLIGENCE OR OTHER RELATED CAUSES OF
Embraer OR ANY ASSIGNEE OF Embraer, WHETHER ACTIVE, PASSIVE OR
IMPUTED; AND
d. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR
DAMAGE TO ANY Aircraft, FOR LOSS OF USE, REVENUE OR PROFIT WITH
RESPECT TO ANY Aircraft OR FOR ANY OTHER DIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES.
8. No representative or employee of Embraer is authorized to establish any
other warranty than the one hereby expressed, nor to assume any additional
obligation, relative to the matter, in the name of Embraer and therefore
any such statements eventually made by, or in the name of Embraer, shall
be void and without effect.
9. Provided the provisions hereof are still effective in accordance with
their terms, then Buyer may assign Buyer's rights pursuant to this
warranty to any entity (but for entities or air carriers which are owned,
effectively controlled or managed by any other airframe manufacturer which
competes in the thirty seven (37) to seventy (70) seat turbo jet market
("Transferee")) provided Buyer notifies Embraer of the identity of such
Transferee at least thirty (30) calendar days prior to such transaction.
In the event such Transferees or Other Transferees (as defined herein)
subsequently transfer any Aircraft or Spares, any Transferees' or Other
Transferees' rights which remain pursuant to this Warranty with respect to
such Aircraft and Spares may also be transferred to any other entity (but
for entities or air carriers which are owned, effectively controlled or
managed by any other airframe manufacturer which competes in the thirty
seven (37) to seventy (70) seat turbo jet market) ("Other Transferees"))
provided that the Transferees or Other Transferees notify Embraer of the
identity of such other entity at least sixty (60) calendar days prior to
such transaction.
<Page>
- --------------------------------------------------------------------------------
ATTACHMENT "D"
- --------------------------------------------------------------------------------
EMB-145
ESCALATION FORMULA
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
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* Confidential
<Page>
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
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* Confidential
<Page>
[*]
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* Confidential
<Page>
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ATTACHMENT "E"
- --------------------------------------------------------------------------------
DISPATCH RELIABILITY GUARANTEE
I. Definitions
a. Available for Dispatch
An Aircraft which is on the ground and cleared for dispatch by
signature of the responsible maintenance personnel of the Specific
Designated Operator, as defined in Article II.a of this Attachment
E, at least half an hour before the scheduled departure time of the
initial flight in any given day shall be deemed to be "available for
dispatch".
b. Maintenance Interruption
1. A Maintenance Interruption occurs when the malfunction of an
item, or necessary checking and/or corrective actions, cause a
flight not to be available for dispatch, or a flight delay
exceeding 15 minutes.
2. A Maintenance Interruption of any or all the flight legs of a
multileg flight constitute only one interruption.
3. To be accounted as a Maintenance Interruption, any reported
malfunction, either verbal or written, must result in
maintenance corrective action.
4. A repetitive problem shall not be counted as a Maintenance
Interruption. However, chronic failures due to design defect
of Embraer-manufactured parts or vendor parts with Embraer
part numbers shall be counted as Maintenance Interruptions.
c. Achieved Dispatch Reliability Percentage ("ADR")
Achieved Dispatch Reliability Percentage ("ADR") is the actual
dispatch reliability percentage obtained by the specific Designated
Operator's fleet of Aircraft in regular revenue service.
[*]
- -------------
* Confidential
<Page>
[*]
II. Embraer, subject to the conditions and limitations expressed in this
Attachment E, will guarantee the Aircraft's dispatch reliability
percentage as follows Aircraft:
a. This Dispatch Reliability Guarantee will be applicable only for
Aircraft first operated by Chautauqua Airlines, Inc. (the "Specific
Designated Operator") and only so long as the Aircraft are operated
by the Specific Designated Operator.
b. The average ADR for the first 12 months period after commencement of
commercial operations of the first Aircraft shall be [*]. The
average ADR for the second 12 months period after commencement of
commercial operations of the first Aircraft shall be [*]. The
average ADR for the third 12 month period after commencement of
commercial operations of the first Aircraft shall be [*] The
average ADR for the fourth 12 month period after commencement of
commercial operations of the first Aircraft (the "Final Period")
shall be [*] (collectively "GDR").
c. In the event that the ADR any 12 month period referred to above is
lower than GDR for the relevant period, Embraer shall diligently,
after notification by Buyer:
1. Develop and offer modification kits to improve ADR under
conditions to be mutually agreed to by the Parties;
2. Make recommendations concerning Specific Designated Operator's
programs, publications and maintenance and operational
policies to improve ADR; and
3. Take all measures, as deemed necessary and appropriate by
Embraer when vendor action does not provide the required
improvement in the ADR.
d. In the event that the average ADR at the end of any twelve month
period described in paragraph II.b. above is lower than the GDR for
such period, Embraer shall credit BUYER for Maintenance
Interruptions calculated according to the following formula:
[*]
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* Confidential
<Page>
In the event the average ADR at the end of any twelve month period
described in paragraph II.b. above is greater than the GDR for such
period, then the negative credit calculated according to the formula
described above shall be carried over the calculation of the
subsequent periods, in a cumulative way, in favor of Embraer.
Buyer or Specific Designated Operator shall calculate measurements
and submit them to Embraer within 60 days after the end of each
12-month period referred to in Article II a. of this Attachment E.
Embraer and Buyer shall attempt to reach an agreement over the data
within 60 days of the submission. Any achieved credit amount will be
credited to Buyer 30 days after the Final Period data conciliation.
Such credit may be used by Buyer only toward future purchases of
Embraer sold spare parts or technical publications or services
offered by Embraer, excluding training.
e. This dispatch reliability guarantee is based upon the following
assumptions provided by Specific Designated Operator, and any change
to the assumptions shall be cause for reevaluation or adjustments of
this guarantee in Embraer's sole discretion.
UTILIZATION: [*]
f. The following elements are not covered under this guarantee:
Interruptions of scheduled flights due to reasons other than
Aircraft mechanical failures, including without limitation:
- Air Traffic Control
- Weather
- Acts of God (i.e. natural disasters, floods and earthquakes,
lightning strikes, bird strikes etc.).
- Accidents
- Incidents
- Negligence
- Force majeure
- Crew refusal
- Optional equipment other than that identified on Attachment
"A" to this Agreement
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* Confidential
<Page>
- Operational delays not related to maintenance
- Passenger and/or baggage loading
- Non-availability of spares or equipment, except when Buyer has
followed Embraer's I.P. and continuous reprovisioning
recommendations as provided for in paragraph II.e. hereof;
- Non-availability of personnel;
- Operation interruptions or Maintenance Interruptions which
could have been prevented if the Minimum Equipment List
("MEL") issued and/or approved by the local regulatory
authority was followed
- If the FAA grounds Specific Designated Operator's fleet, or
one of Specific Designated Operator's Aircraft,
- Maintenance problems caused by Specific Designated Operator's
negligence or misuse of parts or Specific Designated
Operator's failure to take all maintenance actions on the
Aircraft as recommended in all applicable maintenance manuals
- Maintenance problems involving Aircraft or parts that has/have
been involved in an accident, or when parts either defective
or not complying to manufacturer's design or specification
have been used;
- Maintenance problems involving parts that have had their
identification marks, designation, seal or serial number
altered or removed
- Maintenance problem resulting from inadequate parking for
shipment and storage.
- Conditions that exist prior to dispatch which lead to a flight
interruption and could have been prevented by maintenance
prior to dispatch (including but not limited to worn, flat and
cut tires, servicing (ATA Chapter 12), hard landing, dead
batteries, and worn brakes).
III. The foregoing dispatch reliability guarantee is provided subject to
Specific Designated Operator's adherence in all material respects to the
following general conditions:
a. Airplane Operation
Aircraft shall be operated in airline service in accordance with FAA
regulations and as recommended by Embraer through the official and
most updated Operations and Airplane Flight Manual. Specific
Designated Operator shall have available one spare aircraft for each
twenty Aircraft at all times.
b. Inspection Program
The Aircraft shall be maintained in accordance with the most current
EMB-145 MRB document and using the "A" and "C" checks intervals
Specific Designated Operator's program must have provisions for
escalating the checks intervals as
<Page>
soon as the FAA allows. Specific Designated Operator's program
should also include the use of task cards to assist the maintenance
personnel in performing inspection tasks.
c. Aircraft Manuals
Specific Designated Operator shall keep a complete set of Embraer
recommended manuals up-to-date and available to airline personnel
for assisting them with the maintenance and operation of the
Aircraft. A set of recommended manuals should be available at all
maintenance bases (line or heavy) and shall be maintained with the
latest revisions at all times.
d. MEL
Specific Designated Operator shall keep its MEL up to date, with the
most current issue.
e. Stocking Levels
Specific Designated Operator shall stock and maintain Embraer and
suppliers' reasonable recommended spare parts in inventory,
throughout the guarantee period. There shall be a minimum inventory
level at each line maintenance base along with the major parts being
stored at the heavy maintenance facility. Embraer shall provide a
list of recommended parts inventory to the Specific Designated
Operator prior to delivery of the first Aircraft and within
sufficient time for the Specific Designated Operator through Buyer
to place an order with Embraer or the supplier. Specific Designated
Operator shall annually provide an inventory list to Embraer which
shows current stocking levels and the locations of all ERJ-145
parts, and Embraer will then make any recommendations on additional
inventory if needed.
f. Parts Repair
All shop repairs shall be performed in FAA certificated and
authorized repair shops.
g. Staff Levels
Specific Designated Operator shall have available reasonable staff
to properly maintain the Aircraft during scheduled and unscheduled
maintenance. This shall include, but not be limited to, mechanics,
electricians, avionics specialists, inspectors, cleaners, ground
personnel and flight crews licensed or certified by the FAA as
required by appropriate FAA regulations.
h. Training
Specific Designated Operator shall put and keep in place a training
program approved by the FAA, which, at a minimum, shall include the
following items:
1. Initial and recurrent training for pilots in the Aircraft;
<Page>
2. Initial and recurrent training for flight attendants in the
Aircraft; and
3. Initial and recurrent training for the maintenance staff
(airframe, powerplant, electric avionics specialists) in the
Aircraft.
Any maintenance specialist (engine, APU, avionics) will
require suppliers' training.
Specific Designated Operator shall train to the above
standards any new hired employee who will work in or on the
Aircraft.
i. Aircraft Cleaning
Specific Designated Operator shall keep the Aircraft reasonably
clean, inside and out, by commercial airline standards at all times.
This includes without limitation, the engines, wheel wells,
nacelles, landing gear and flight control areas.
j. Service Bulletins
When Embraer recommends that Specific Designated Operator implement
a service bulletin which improves performance or dispatch
reliability, enhances flight operations or decreases maintenance
costs, without materially adversely impacting any of the foregoing,
Embraer Customer Support Department shall contact Specific
Designated Operator's Vice President of Maintenance, in writing,
with recommendations that the service bulletin be complied with.
Specific Designated Operator will schedule the Aircraft for
incorporation of such service bulletin within three (3) months, but,
subject to Embraer's agreement, may schedule it for incorporation
during a maintenance check, so as to minimize interruption to
scheduled service.
k. Ground Support Equipment
Embraer shall provide Specific Designated Operator two lists of
tooling and ground support equipment required to maintain the
Aircraft which lists shall be subject to Specific Designated
Operator's reasonable approval. One list will cover line maintenance
bases while the other will apply to heavy maintenance facilities.
Specific Designated Operator will be required to maintain these
levels of required tooling and ground support equipment in good
working order at all times.
l. Reliability Reporting
Specific Designated Operator shall provide monthly to Embraer a
complete Aircraft reliability report. This report shall include
Aircraft total time and cycles, dispatch reliability, on-time
performance, completion factor, pilot reports, schedule interruption
description, and component removals. Shop finding reports and tear
down reports (for each failure completed) by authorized agencies and
SDR's with date, Aircraft registration, problem description,
maintenance action, and part number and serial number of the
components
<Page>
removed and installed shall be maintained by the Designated Operator
and shall be provided to Embraer as requested. Specific Designated
Operator shall use the ATA 100 chapter breakdown format for all
reports.
m. Rejection
Specific Designated Operator shall not unreasonably reject Embraer's
recommendations/changes/solutions which in Embraer's opinion, would
result in an improvement in Specific Designated Operator's dispatch
reliability. Any such rejection shall be cause for re-evaluation or
adjustment of this guarantee in Embraer's sole discretion.
n. Certification or Regulatory Changes
The achieved maintenance interruption shall not take into account
those interruptions which were originated by conformity to mandatory
regulatory change.
o. Achieved Dispatch Reliability Review Meeting
An Achieved Dispatch Reliability Review Meeting shall be scheduled ,
if necessary, and at the end of each six (6) month period of
Specific Designated Operator's Aircraft operation. Representatives
of Specific Designated Operator and Embraer shall participate in the
meetings and will:
1. Review current Achieved Dispatch Reliability;
2. Eliminate irrelevant or non-Aircraft-intrinsic interruption
claims from computed cancellation rates; and
3. Review Specific Designated Operator's compliance with Service
Bulletins as required by Article III.j of this Attachment E,
review disputed claims, and consider methods for improvement
of Achieved Dispatch Reliability.
Specific Designated Operator shall permit Embraer access to
all of its data which can be used in understanding and
analyzing the dispatch reliability failure.
IV. Suspension
This guarantee shall be automatically suspended and shall not apply during
the period of any labor disruption or dispute involving a significant work
action which affects in whole or in part the Aircraft normal operation and
maintenance.
V. Specific Designated Operator will not include in the calculation of the
ADR Maintenance Interruptions occurring under any of the circumstances
listed below:
a. When the Aircraft has been used in an attempt to break records, or
subjected
<Page>
to experimental flights, or in any other way not in conformity with
the flight manual or the airworthiness certificate, or subject to
any manner of use in contravention of the applicable aerial
navigation or other regulations or rules, issued or recommended by
government authorities of whatever country in which the Aircraft is
operated, when accepted and recommended by ICAO; and
b. When the Aircraft or any of its parts has/have been altered or
modified by Specific Designated Operator, without prior approval
from Embraer or from the manufacturer of the parts through a service
bulletin, provided such approval has not been unreasonably withheld.
VI. THE GUARANTEES, OBLIGATIONS AND LIABILITIES OF EMBRAER, AND REMEDIES OF
BUYER SET FORTH IN THIS DISPATCH RELIABILITY GUARANTEE ARE EXCLUSIVE AND
IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL
OTHER RIGHTS, CLAIMS, DAMAGES AND REMEDIES OF BUYER AGAINST EMBRAER OR ANY
ASSIGNEE OF EMBRAER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH
RESPECT TO ANY ACHIEVED DISPATCH RELIABILITY.
VII. The terms and conditions of this dispatch reliability guarantee do not
alter, modify or impair, in any way, the terms and conditions of
Attachment C (EMB-145 Aircraft WARRANTY CERTIFICATE) to this Agreement.
VIII. The guarantee hereby expressed is established between Embraer and Buyer
and it cannot be transferred or assigned to others, unless by previous
written consent of Embraer.
IX. As of condition of the guarantee hereby expressed, Specific Designated
Operator shall execute a waiver consistent with Section VII of this
Attachment E, in a form acceptable to Embraer.
<Page>
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ATTACHMENT "F"
- --------------------------------------------------------------------------------
FORM OF APPOINTMENT OF AUTHORIZED REPRESENTATIVE
______________ ("Buyer") hereby designates and appoints _________________
as the authorized representative of Buyer for the purpose of inspecting,
reinspecting, and accepting delivery from EMBRAER-Empresa Brasileira de
Aeronautica S.A.("Embraer"), on behalf of and in the name of Buyer, of the
Embraer Model EMB-145 aircraft having Manufacturer's Serial No. 145___
(including the engines, appliances and parts installed thereon, the "Aircraft")
and Spares, as defined in that certain Purchase Agreement GCT-025/98 between
Buyer and Embraer dated June __, 1998, to be delivered by Embraer to Buyer
pursuant to the Purchase Agreement Assignment to be dated as of or about ______
__, 199__ between Solitair Corp. and Buyer, including the authority to accept
delivery of said Aircraft and Spares, and to execute and deliver any additional
documents with respect to the delivery for said Aircraft and Spares in such form
as such authorized representative executing the same shall deem appropriate.
Dated: __________ __, 199__
_______________________________
By:_______________________________
Name:
Title:
The foregoing appointment
is hereby accepted
____________________________
Name:
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ATTACHMENT "G"
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FORM OF WARRANTY BILL OF SALE
KNOW ALL MEN BY THESE PRESENT THAT Embraer - Empresa Brasileira de Aeronautica
S.A. ("SELLER"), a Brazilian company, whose address Av. Brigadeiro Faria Lima,
2170 - Putim, Sao Jose dos Campos, Sao Paulo, Brazil, is the owner of good and
marketable title to that certain EMB-145 LR Aircraft bearing Manufacturer's
Serial No. ___________, with all appliances, parts, instruments, appurtenances,
accessories, furnishings and/or other equipment or property incorporated in or
installed on or attached to said engine (hereinafter collectively referred to as
the "Aircraft") purchased by Solitair Corp. ("BUYER") under the Purchase
Agreement No. GCT-025/98, dated as of June __, 1998, including Attachments,
Exhibits, Letters, Amendments and Agreements by and between SELLER and BUYER.
THAT for and in consideration of the sum of US$ 10.00 and other valuable
consideration, receipt of which is hereby acknowledged, SELLER does this
__________ day of __________, 1998, grant, convey, transfer, bargain and sell,
deliver and set over to BUYER and unto its successors and assigns forever, all
of SELLER's rights, title and interest in and to the Aircraft.
THAT SELLER hereby represents and warrants to BUYER, its successors and assigns:
(i) that SELLER has good and marketable title to the Aircraft and the good and
lawful right to the Aircraft and the good and lawful right to sell the
same; and
(ii) that good and marketable title to the Aircraft is hereby duly vested in
BUYER free and clear of all claims, liens, encumbrances and rights of
others of any nature. SELLER hereby covenants and agrees to defend such
title forever against all claims and demands whatsoever.
This Full Warranty Bill of Sale is governed by the laws of the state of New
York, United States of America.
IN WITNESS WHEREOF, SELLER has caused this instrument to be executed and
delivered by its duly authorized officer and attorney in fact.
Date as of ____________________, 1998.
EMBRAER - EMPRESA BRASILEIRA DE AERONAUTICA S.A.
By: ___________________________
Name: ___________________________
Title: ___________________________
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ATTACHMENT "H"
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FORM OF GUARANTY- ASSIGNEE
FOR VALUE RECEIVED, Solitair Corp., a corporation owned, managed, or effectively
controlled by Wexford Management LLC and organized under the laws of Delaware
("Guarantor"), pursuant to Article 16 b. of that certain Purchase Agreement
GCT-025/98 dated as of June __, 1998, among Solitair Corp. ("Buyer") and
EMBRAER-Empresa Brasileira de Aeronautica S.A. ("Embraer"), as the same may be
amended from time to time (the "Purchase Agreement"), does hereby
unconditionally and irrevocably guarantee to Embraer (i) the due and punctual
payment of each amount due and owing that ____(NAME)_____, as assignee of the
Purchase Agreement from Buyer ("Assignee"), is or may become obligated to pay
under and in accordance with the terms of the Purchase Agreement, and (ii) in
the event of any nonpayment, Guarantor agrees to immediately pay, or cause such
payment to be made, of such (such payment obligations of Assignee being herein
referred to as the "Obligations"). Guarantor further agrees to pay all
reasonable expenses (including, without limitations all reasonable fees and
disbursements of counsel) that may be paid or incurred in enforcing any rights
with respect to, or collecting, any or all of the Obligations and/or enforcing
any rights with respect to, or collecting against, Guarantor under this
Guaranty. The obligations of Guarantor to make any payments hereunder shall be
subject to the terms and conditions of the Purchase Agreement applicable to the
Obligations.
Capitalized terms used but not defined herein shall have the respective meanings
set forth in, and shall be construed and interpreted in the manner described in,
the Purchase Agreement.
Guarantor hereby waives notice of acceptance of this Guaranty, and agrees that,
in its capacity as a guarantor, it shall not be required to consent to, or to
receive any notice of, any supplement to or amendment of, or waiver or
modification of the terms of, the Purchase Agreement.
This Guaranty is being furnished to induce Embraer to execute an acknowledgement
of assignment of the Purchase Agreement to Assignee.
Guarantor represents and warrants that, as of the date hereof:
a. Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has all necessary corporate power
and authority to conduct the business in which it is currently engaged and
to enter into and perform its obligations under this Guaranty.
b. Guarantor has taken, or caused to be taken, all necessary corporate action
to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder.
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c. The execution and delivery by Guarantor of this Guaranty, the performance
by Guarantor of its obligations hereunder and the consummation by
Guarantor of the transactions contemplated hereby, do not and will not (A)
violate or conflict with any provision of the certificate of incorporation
or by-laws of Guarantor, (B) violate or conflict with any law, rule, or
regulation applicable to or binding on Guarantor or (C) violate or
constitute any breach or default (other than a breach or default that
would not (x) result in a material adverse change to Guarantor or (y)
adversely affect Guarantor's ability to perform any of its obligations
hereunder) under any agreement, instrument or document to which Guarantor
is a party or by which Guarantor or any of its properties is or may be
bound or affected.
d. The execution and delivery by Guarantor of this Guaranty, the performance
by Guarantor of its obligations hereunder and the consummation by
Guarantor of the transactions contemplated hereby do not and will not
require the consent, approval or authorization of, or the giving of notice
to, or the registration with, or the recording or filing of any documents
with, or the taking of any other action in respect of, (A) any trustee or
other holder of any indebtedness or obligation of Assignee, (B) any
national, federal, state or local government regulatory, judicial, or
administrative entity of competent jurisdiction, or (C) any other party.
e. This Guaranty has been duly authorized, executed and delivered by
Guarantor and constitutes the legal, valid and binding obligation of
Guarantor enforceable against Guarantor in accordance with the terms
hereof, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar
laws affecting the rights of creditors generally and general principles of
equity, whether considered in a proceeding at law or in equity.
f. Each of the foregoing representations and warranties shall survive the
execution and delivery of this Guaranty.
No failure or delay or lack of demand, notice or diligence in exercising any
right under this Guaranty shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right under this Guaranty.
This Guaranty is an absolute, unconditional and continuing guaranty of payment
and not of collection. Guarantor waives any right to require that any right to
take action against Assignee be exhausted or that resort be made to any security
prior to action being taken against Guarantor.
In the event that this Guaranty or the Purchase Agreement shall be terminated,
rejected or disaffirmed as a result of bankruptcy, insolvency, reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
proceedings with respect to Assignee, Guarantor's obligations hereunder to
Embraer shall continue to the same
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extent as if the same had not been so terminated, rejected or disaffirmed.
Guarantor shall and does hereby waive all rights and benefits that might , in
whole or in part, relieve it from the performance of its duties and obligations
by reason of any proceeding as specified in the preceding sentence, and
Guarantor agrees that it shall be liable for all sums guaranteed, in respect of
and without regard to, any modification, limitation or discharge of the
liability of Assignee that may result from any such proceedings and
notwithstanding any stay, injunction or other prohibition issued in any such
proceedings. Furthermore, the obligation of Guarantor hereunder will not be
discharged by: (a) any extension or renewal of any obligation of Assignee under
the Purchase Agreement; (b) any modification of, or amendment or supplement to,
any such Purchase Agreement; (c) any furnishing or acceptance of additional
security or any release of any security; (d) any waiver, consent or other action
or inaction or any exercise or non-exercise of any right, remedy or power with
respect to Assignee; (e) any change in the structure of the Assignee, any change
in ownership of the shares of capital stock of Guarantor or Assignee or any
merger or consolidation of either thereof into or with any other person; (f) any
assignment, transfer, sublease or other arrangement by which Assignee transfers
or loses control of the use of the Aircraft or any part thereof; or (g) any
other occurrence whatsoever, except payment in full of all amounts payable by
Assignee under the Purchase Agreement and performance in full of all the
Obligations in accordance with the terms and conditions of the Purchase
Agreement.
Guarantor understands and agrees that its obligations hereunder shall be
continuing, absolute and unconditional without regard to, and Guarantor hereby
waives any defense to, or right to seek a discharge of, its obligations
hereunder with respect to; (a) the validity, legality or enforceability of the
Purchase Agreement, any of the Obligations or any collateral security therefor
or guaranty or right of offset with respect thereto at any time or from time to
time held by Embraer; (b) any defense, setoff or counterclaim (other than a
defense of payment, performance (including payment or performance attributable
to a right of setoff provided for in the Purchase Agreement that may at any time
be available to or be asserted by Assignee) or breach by either party to the
Purchase Agreement until such breach is resolved under the terms of the Purchase
Agreement); or (c) any other circumstances whatsoever (with or without notice to
or knowledge of Assignee or Guarantor) that constitutes, or might be construed
to constitute, an equitable or legal discharge of Assignee or the Obligations,
or of Guarantor under this Guaranty, in bankruptcy or in any other instance.
Notwithstanding any payment or payments made by Guarantor hereunder or any set
off or application of funds of Guarantor by Embraer, Guarantor shall not be
entitled to be subrogated to any of the rights of Embraer against Assignee or
any collateral, security or guaranty or right of set off held by Embraer for the
payment of the Obligations, nor shall Guarantor seek or be entitled to seek any
reimbursement from Assignee in respect of payments made by Guarantor hereunder,
until all amounts and performance owing to Embraer by Assignee on account of the
Obligations are paid and performed in full. The obligations of Guarantor
hereunder shall be automatically reinstated if and to the extent that any
payment by or on behalf of Assignee in respect of any of the
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Obligations is rescinded or must be otherwise restored by any holder of any of
the Obligations as a result of any proceedings in bankruptcy or reorganization
or similar proceedings and Assignee agrees that it will reimburse such holders
on demand for all reasonable expenses (including, without limitation, all
reasonable fees and disbursements of counsel) incurred by such holders in
connection with such rescission or restoration.
Any provision of this Guaranty that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
This Guaranty shall be binding upon the successors and assigns of Guarantor;
provided, that no transfer, assignment or delegation by Guarantor, other than a
transfer, assignment or delegation by operation of law, without the consent of
Embraer, shall release Guarantor from its liabilities hereunder. Subject to the
second preceding paragraph, this Guaranty shall terminate and be of no further
force and effect upon the performance and observance in full of the Obligations.
All notices, requests and demands to or upon Guarantor or any beneficiary shall
be mailed in accordance with the terms of Article 34 of the Purchase Agreement.
Guarantor hereby agrees to be bound as if it were the Assignee by the provisions
of Articles 20, 21, 23, and 25 of the Purchase Agreement, which are incorporated
herein by reference as if fully set forth herein.
Dated: _____ __, 199__
SOLITAIR CORP.
By: _______________________________
Name:
Title: